4
Mar
2011
Raise Your Credit Score
Raise your credit score!
Repair your credit!
Fix your credit! 100% guaranteed!
You may have seen one of these ads. Such bold promises and with prices to match. However, the Federal Trade Commission (FTC) has released a Consumer Alert against fraudulent credit repair scams, asking consumers to be wary of claims like these.
Instead of relying on quick credit repair schemes to fix your credit score, why not do the repairing yourself? There are many ways you can raise your credit score without spending a single cent. All you need is some amount of credit score understanding and what steps are needed to maintain or build a good credit.
Improve your Payment History
Your payment history is the first factors included in calculating your credit score, so it makes sense that you raise your credit score by improving your payment history. So how do you do it?
Well, the answer should be obvious. Pay your bills on time. If you have missed any payments, get current and stay that way. As much as possible, dont wait until your bills are at collection. Collection accounts have a tendency to stick in your credit report. Then, you can kiss your hopes to raise your credit score goodbye.
Out of all these tips, the one important thing you need to remember is punctuality in making payments. Thats all. Once youre passed that hurdle, then youll have no trouble trying to raise your credit score.
Lower Amounts Owed
As a rule, credit card debts should be kept at a minimal level. Even if you pay your credit card bills on time, the way credit card companies report your balances to the credit bureau could negatively affect your credit score. The credit card company does it once at any time of the month so if you havent yet made your payments at the time, its going to look to the credit bureau that you have a lot of outstanding credits.
You cant raise your credit score if you keep charging numerous purchases in your credit card. Also, paying off your debt is a better option than moving it around. The most effective way to raise your credit score in this area is by paying down your revolving credit. Sometimes, owning the same amount but with fewer open accounts can help lower your score.
Improve Your Credit History
A trick used by some people in order to make it appear that they have a long credit history is to open multiple new accounts. But this scheme is too risky. If you open a lot of new accounts in a very short time, this could actually lower your score down and make you appear like a risky borrower.
25
Feb
2011
Poor Credit Debt Consolidation Loans Helping The Needy
Poor credit history, sub prime credit history, adverse credit history, non status credit history, impaired credit history or bad credit history. There are many incarnations of this term but the idea still remains the same.
It means that a person has taken a loan previously and has defaulted with the repayments. Which makes it difficult for people to get loans and even when they get loans it is at an inflated rate of interest. All this is estimated on the basis of your credit score and it represents our financial credit worthiness. A score of below 600 is the score which puts the tag of poor credit on us. There are other scores as well which tell us about our standing like FICO scores. Experts for calculating usually take factors like payment history, amounts owed and types of credits used. So they all should not be ignored.
Different need compel us to buy different loans to cater for each of them. This puts us in an unwanted position where we owe debts to numerous creditors.
A debt consolidation loan is a tool which helps us in dealing with that possibility. With debt consolidation loan the borrowers can take a single loan which would negate those earlier loans and those creditors who trouble us for not making our repayments in time.
Debt consolidation is even more useful for people with bad credit history because this gives them a chance to improve on their reputation of poor credit history. This can be done by producing the similar results as desired by the creditor. Not only that other benefits of going for debt consolidation include:
APR is lower than the average APR of the amounts owed previously. Hence lower monthly installments.
No creditors chasing you around asking for their money.
While looking for debt consolidation loans you can get expert advice by the counselors.
It is psychologically easier to pay one loan than numerous different loans.
Depending upon your requirements and circumstances you can borrow a secured debt consolidation loan or an unsecured debt consolidation loan. All you need to do is estimate your requirements and then go online and find yourself a lender which would be willing to provide you with the loan amount you desire. Then go through the required formalities of the lender and the loan will be made available quickly.
It is not easy to be a borrower and have multiple creditors as you have to serve all of them in a manner on what you have agreed failing to do so would be harmful and can have derogatory consequences. This is why debt consolidation loans are there to help you and each borrower in the similar condition should consider going for them. The situation can only get better.
21
Jan
2011
Increase Credit Score How Do Credit Scores Work?
Although many mortgage companies and finance experts have been warning consumers about the importance of maintaining a good credit score, many people fail to recognize the value. When applying for any type of credit, potential lenders review our credit history and base loan approvals on its contents. If applying for instant credit, lenders simply use credit scores. Here are a few tips to help you understand how credit works, and tips for boosting your personal rating.
The Value of Credit Scores
Credit scores are a valuable tool for lenders. Because banks and other lending institutions receive numerous loan requests on a daily basis, it is challenging determining which applicants should get approved.
Lenders have many methods for judging a person’s credit worthiness. To speed up the process, several lenders begin by reviewing a credit score. To separate the good applicants from the bad, they establish a minimum credit score requirement. If your score falls below this requirement, it’s an immediate credit denial.
Calculating Credit Score
Many factors play a role in credit scoring. Scores are between 300 and 850. The higher the score, the better the credit. Although having perfect credit is very hard, it is possible to maintain a good credit rating. This typically consists of scores above 680. Those who fall into this category usually qualify for prime rates on home loans, auto loans, and credit cards.
When calculating credit scores, several factors are taken into account. For example, payment history, outstanding debt, length of credit, and inquiries. Payment history and outstanding debts contributes largely to credit scoring.
Payment history with creditors is important because future lenders are curious as to whether you submit payments on time, or have a habit of being late. Moreover, having too much debt will have a negative effect on your score.
Raising Credit Scores
Little things can quickly boost your credit score. For starters, begin establishing a good payment history with creditors. Because payment history contributes to 35% of credit scoring, paying creditors on time is a great way to increase your score. Furthermore, reduce your outstanding debts. Debt contributes to 30% of scoring. Thus, the more debt you have, the lower your score. Keeping credit cards at their maximum limit is damaging. If possible, keep cards at about 25% of their maximum limit.
31
Dec
2010
How to Evaluate and Raise Your Credit Score
Why do some people get offers for pre-approved credit cards and others dont? What do car dealers know about your financial health that you dont know? The answer is your credit score.
Your credit score is a number generated by a mathematical formula to estimate how likely you are to pay your bills. Based on the information in your credit reports from the three credit bureaus, Equifax, Experian, and TransUnion, your credit score has been a factor in your ability to qualify for loans and good interest rates for more than twenty years. Lenders compare your credit report with millions of others to determine your score.
While there are a variety of credit scoring methods available to lenders, the most widely used is the FICO score. Based on a scoring system developed by Fair, Isaac & Co., FICO scores range from approximately 300 to 800 points and are provided to lenders by the three credit bureaus. You also have access to your FICO scores but will be charged a fee by each credit agency providing your report.
According to Fair Isaac, the credit scores of the American public are divided as follows:
499 and below 1 percent
500-549 5 percent
550-599 7 percent
600-649 11 percent
650-699 16 percent
700-749 20 percent
749-799 29 percent
800 and above 11 percent
A score of 720 or higher will probably get you the best interest rates on a home mortgage. Your credit card company looks at your credit score to decide whether or not to raise your credit limit or charge you a higher interest rate. The higher your credit score, the better you look to lenders and the lower your interest rates.
Several factors affect your credit score including your payment history, the length of your credit history, any outstanding debt, how long and how often youve had derogatory credit information, such as bankruptcies, charge-offs, or collections, and the amount of credit you are using compared to the amount of credit available to you.
So how do you raise your credit score? Well, the first thing to do is to order a copy of your credit report with the score included from each of the three credit bureaus. Review your reports and note any discrepancies. Correcting blatant errors is the first step to repairing your credit, and changes can take up to three months to be recorded.
Next, remember to pay your bills on time. It may seem like a small thing at the time youre writing that monthly check, but an accumulation of timely payments says a lot to a potential lender looking for a reliable client. Prompt payments in the last few months can actually make a big difference in your credit score.
While collections, bankruptcies, and late payments have the greatest negative effect on your credit score, your debt is a factor as well. Keeping your account balances between 25% and 50% of your available credit signals a responsible borrower. For example, if you have a credit card with a 2000 limit, keep your debt below 1000. For this reason, consolidating your credit card debt can actually lower your credit score, as it raises the ratio of your debt to your available credit. The best solution is to simply pay off your existing cards as quickly as possible.
Excessive inquiries over a short period of time also damage your score. When lenders, banks, or credit card companies check your credit report, the inquiries are recorded. Several of these hard inquiries in the same time period may signal to other lenders that you are opening multiple accounts due to financial difficulty.
If you discover that you have accounts on your report that you didnt open, or your public records such as tax liens or judgments that are not yours, you may be a victim of identity fraud. It is up to you to deal with the damage that can happen to your credit score because of this criminal activity. Being aware is your first step, but when the items end up on your report, you have no alternative but to clean it up.
Overall, give yourself time to build a good credit score and even more time to correct serious problems. The length of your credit history is another determining factor in a good score. Lenders want to know that you are able to maintain prompt payments and good standing for a period of time. So check your reports yearly, do your due diligence, and your score can improve.
17
Dec
2010
How to Improve Credit Score
The first thing that lenders will check when you apply for credit whether a loan, mortgage, or a credit card purchase is your credit score. Thats because before they decide to lend you money, they want to know how good a risk you would be.
Lenders are business people and as business people they always consider the risks involved when they make an investment. The investment is you, of course. Or more precisely, your capacity to pay. If the risk far outweighs the investment, then naturally lenders would turn away from such a deal.
The credit score helps lenders make their decisions easier and faster. Because your credit score is the closest thing to accurate information determinative of your future credit performance, they base their decisions concerning your credit application on this three-digit number.
In short, your credit score is that thing that could make or break your credit application.
For this reason, many consumers have decided to take steps to learn how to improve credit score. Even if you already have good credit standing with your lenders, it still pays to learn more ways on how to improve credit score even further. A good credit score can help ensure that you get the most favorable interest rates. How much more if youve got close to perfect credit score?
Below are some steps to help on how to improve credit score:
Improve Your Payment History
Paying your bills on time is the first order of the day when it comes to learning how to improve credit score. Even a few delays in your payment history could take 100 points off your credit score. Thats why it is imperative that you be punctual in making your payments. Lenders value punctuality in making payments above all.
Keep Debt to a Minimum
The next step in learning how to improve credit score is to reduce your debts. Your credit score is partly calculated by comparing credit balance with your outstanding credit. If you have more credit available and lesser debts, this would positively affect your credit score. However, if you have more debts than you have credits available, this could drag down your score to the pits.
One way to keep debt to a minimum is to keep your credit card balances low. Also, dont close those unused accounts just yet because zero balance might help you on how to improve credit score. Dont open new accounts either as this could lower your credit-to-debt ratio.
Length of Your Credit History
As a general rule, short credit history could mean a low credit score. But after you learn how to improve credit score, youll find out that even if you only have three years of credit history, it would have only minimal impact on your credit score, so long as you follow the above-given advice.
4
Jun
2010
A LoveHate Relationship: How your credit score can open and
A LoveHate Relationship: How your credit score can open and slam doors for you
There are many ways to get ahead financially: attend seminars where you cut up your credit cards with hundreds of other people, participate in debt consolidation services that help you take out a home equity loan or refinance your home, or you can transfer debt on one credit card to another credit card with an introductory rate of 0% (which goes up to 12% six months down the road). The reason these methods dont work is because we dont concurrently cut our expenses while implementing these strategies. Even if were making more money, unless we cut expenses, we will continue to spend more money than we have and incur debt. Manage yourself and your money. Money is like food; we dont eat only when were hungry, and we certainly dont spend only when we need something.
Beware: Debt forgiveness can hurt you. The company that forgives your debt can issue a 1099C, which means the forgiven amount gets added to your taxed income.
When theres a will, theres another way:
Your credit score (also called your FICO or Beacon score) will affect the interest rate youre able to secure. Credit scores range from 500 to 850. Where are you on the scale?
Whats in a number?
500 and belowyour in serious trouble
650 to 680 you probably will have a difficult time getting credit, and if you do it will be at higher rates
700+–excellent score
How you got your credit score:
a)Payment history (35% of score). Make payments on time or early.
b)Amounts you owe (30% of score)
c)Credit history (15% of score). The longer you have credit, the higher your score can be.
d)New credit (10% of score). New credit cards.
e)Type of credit you have in use. Mortgages, Bloomingdales, etc.
There are three reporting services that can give you your score: Equifax.com, Experian.com and Transunion.com. At least once, do an experiment and order a report from all three. They probably will provide a complimentary report each year, per person. You will most likely find inconsistencies in the reports such as missing and incorrect information. Each time a credit report is run on you, your score is lowered by two or three points. You still want to shop around for a mortgage, but consider using a mortgage broker who runs one report to shop around the loan. If you go to five different banks, that can drop your score 15 points.
28
May
2010
7 Tips To Increase Your Credit Score
Having a high credit score can mean the difference of thousands of dollars of saved interest expense compared to others with a lower score. For example, if you improve credit score results from the credit bureaus, just a few points that increase your credit score can make huge difference in the interest rate you will pay for a home purchase. It pays to increase your credit score!
The most commonly used credit scores available to lenders are FICO scores, which is a scoring method created by Fair, Isaac & Co…FICO!
These scores are provided to lenders by the three major credit bureaus: Equifax, Experian and TransUnion. Before we get into some tips how to improve credit scores, it pays to review the major areas that determine your FICO score.
1. Payment history on credit and retail store cards, loans and mortgages.
2. Amount that you owe. Credit agencies look at how many accounts have balances and the proportion of that balance to the credit line.
3. How long is your credit history? The longer the better.
4. New credit accounts. Applying for a bunch of credit cards all at once can hurt your score.
5. Different credit types, such as mortgages, retail loans, credit cards and installment loans.
6. How many late payments do you have?
Now, with the playing field laid out, lets work to boost your credit score! Some methods that boost your credit score take time, months or years, and others areas to improve credit score can be made with a phone call right now! That said, here are the 7 tips to raise your credit score!
7 tips to improve credit scores
1. Pay your bills on time. Your payment history is a major factor (35% of your FICO score) in determining your credit score. If you pay your bills late, or had an account referred to collections, your credit score will take a major hit.
2. Sign up for online banking and make sure your regular recurring bills are paid automatically. This way you will not forget a payment that will wind up reducing your credit score.
3. Increase your credit limit. Another large factor is the amount of your debt in relation to your credit limit. If you have a card with a $10,000 credit limit and your balance is $9,000, this will not help to improve your score. To make the debt/credit limit ratio look better, you can try to call your credit card company and request an increase in your credit limit. Don’t use the extra credit though! That defeats the whole purpose and puts you further in debt!
4. Don’t apply for many cards at once. This will not improve your credit score because this is a characteristic of high credit risk groups.
5. Dont ever close an open credit card account. If you pay off a credit card down to a zero balance, leave it open. Remember that a positive factor for your credit score is how much available credit you have at your disposal when compared to your credit balance, in addition to the length of your credit history.
6. Apply for loans within a two-week period. Every time you request a loan and the lender pulls your credit report, it can hurt your score. It is part of the FICO formula that reasons “this person is trying to apply for credit and loans and possibly be trying to live way beyond their means!” If you keep the loan process within a two-week period, all of the credit report lookups are bundled together as one single request!
7. Check for errors on your credit report. Examine your credit report for errors and contact the credit reporting agencies to fix any errors on your credit report.
If you take action and follow these tips, you will be able to give your credit score and immediate boost and gradually increase it even more as time passes. The major keys are to pay your bills on time and reduce your debt amounts when compared to your credit limit. This has a twofold benefit of improving your credit score and reducing your debt.
Copyright 2005 FinancialTipsForYou.com