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Lower Debt Balances Can Raise Credit Scores

Bad Credit Advice — Thu, 09 Dec 2010 20:23:14 +0000

Having a lower debt translates to a better credit score. Yes, that is true. While most people think that the amount of outstanding balances that they have do not matter, it does matter. Many creditors are looking into that. Meaning, just because you have a good credit score as of the moment it does not mean that they will not look into your overall outstanding balance. Honestly speaking, it is actually one of the top factors that they consider in giving you your credit rating. Credit government bureaus consider the amount of debt that you have as part of your credit worthiness.

Why raise my credit score?

You are probably asking the same question as everybody else, “Why raise my credit score?” Many people are posing that question. Raising your credit score or scoring positively is very important because as mentioned earlier, your credit score serves as your creditworthiness. Meaning, banks and credit card providers will see your report as your financial reference every time you will do bank transactions like fund transfers, application for a new card or account, and getting housing or car loans. Thus, it is highly important that you have a good score because it will enable you to apply easily without going through all the financial background check as required by most companies.

Understand your credit score

The first step towards getting a better rating is to understand the numbers stated in your credit report. These documents are mostly available for free because every year, the credit bureau assigned to you sends them out. If you have not received a copy yet, you can either request for it and it will be delivered to you.

The first thing that you have to do is to verify whether all the information stated is correct. Even these little details matter a lot when it comes to having a positive report. Once you have received your credit report, you can correct misinformation for duration of 30 days.

Once everything is corrected and checked, see if you have any discrepancies and delinquency like late payments, especially the late payments because having it is a negative sign already. Do everything to correct this information.

You can start correcting it by paying your bills on time. Not only will it generate a positive feedback on your next report, but by doing so you will be able to lower debt and in due time you will be able to eliminate your balances with your creditors.

Help With Credit Reports and Scoring

Bad Credit Advice — Thu, 28 Oct 2010 16:57:03 +0000

Most people do not have any idea on how credit scoring works. It is not just about obtaining a high score, but having a consistently good credit score, too. If you want to increase your chances of getting a mortgage or housing loan in the future, you must learn how to read a credit report so that you will be able to do something about your current report in case it shows some glitches.

What affects your credit score?

Your credit score is not only dependent on the amount of things that you buy or the amount of balances you incur, but on several things. Here are some of the credit scoring factors that affect your score:

1. The number of credit cards or accounts you have.

Too many or too little credit cards or accounts will affect your credit score because credit cards are indicators of honesty. If you own only a few of these, the credit scorers will take it as manifestation that you cannot be trusted much when it comes to financial stability. Same goes with having too many credit cards. They might think that you are just playing around with your credit cards and that you do not take it too seriously.

2. The things that you buy.

Getting things that an average person uses daily such as groceries, food, and medicines will earn you greater points compared to getting extravagant items like a plasma television set or a complete surround sound system.

3. Your paying habit.

Your ability to pay on time affects your credit score. If you are used to paying your balances on time, then it will make your credit score higher compared to a person who is delayed by 30, 60, or even 90 days. If you see these three numbers on your credit report, then it is a negative point instantly.

4. Too many rejected application in the last 12 months

Rejected applications for new credit cards or bank accounts also affect your credit score. The credit scoring organization will look into why you got rejected several times. It may signify that you are in an unstable financial situation, thus many reject your application.

Maintain a good credit score

Simple things like paying your balances on time can help you earn a good credit standing. If you know how to read a credit report, study your most recent credit report and look into the factors that affected your score. Finally, think of ways on how you can improve and resolve your negative scores.

The Myth of Fast Credit Repair

Bad Credit Advice — Fri, 02 Jul 2010 22:14:06 +0000

If your credit score is standing in the way of your dreams, you probably wish that you could snap your fingers and have the situation rectified. While you probably are interested in learning how to fix credit, chances are that it is hard to look the other way when you hear of some new company that says they can offer you almost instant credit repair. Now, I wish I could tell you that I was about to share with you some magical strategy that would transform your 520 score to a 720 in just a few weeks. But, the reality is that no such strategy exists – at least not legally.

Sure there are definitely tactics that you can use to make an impact on your credit as quickly as possible. But, even the best of these strategies will take weeks if not months. And, if your credit is severely damaged, you should understand that it can take years to rectify the situation.

Avoid Scams

While you may be tempted to follow the latest shiny bright object that comes along, chances are that if it seems to good to be true, it is a scam! Do you really think that some company has a perfectly legal strategy to completely eliminate your bankruptcy from your credit file? Um, no! They may suggest some illegal strategies, like file segregation. While file segregation will get you a new credit file, it may also get you a nice visit in the nearest state facility. It is 100% legal and the way these companies set it up, the only one at risk is you.

Slow and Steady Wins the Race

The bottom line is that there is no magic solution for fixing your credit. It is going to take work and a bit of time. Just how long will be determined by your unique situation, but in time you will be able to start getting approvals for things like home loans for poor credit.

Watch Out For Credit Repair Posers

admin — Fri, 24 Jul 2009 17:05:37 +0000

In the issue of repairing your credit, it is best to do it yourself. Most often, you may hear or see advertisements claiming outstanding credit repair services offering you “legal” and “guaranteed” solutions for your credit problems. These services may use motto’s that are quite enticing to those who are in dire need of credit repair. There are even others who get easily convinced after reading “authentic” testimonials from several customers, who might not actually exist.

When you are really in need of credit repair, the first thing you want to do is to act immediately. You should remember that this action should be done by you and not anyone else. Luckily, there are several factors that can help you avoid scam credit repair services.

Fraudulent Credit Repair Services

Vulnerable people who have a poor credit track record are targeted by many unscrupulous companies who promise them a magical solution to their problems. For a price, that is. They not only promise to tidy up your credit report but to also help qualify for loans and insurance. Instead of improving your financial circumstances these credit repair scams can do you real harm. Such businesses regularly vanish into thin air.

How Do We Recognize a Scam?

There are, however, some genuine credit repair services, so how can You separate the good from the bad? A sign that is an absolute give-a-away is when a company requests payment in advance for their credit repair services. Another indication that a service is scamming you is if it does not give information about their legal rights.

There are companies that advise consumers to directly contact a credit reporting agency – you should avoid such companies. More so, if the company you have responded to suggests that you to create a new credit identity and then make a new credit report by applying for an Employer Identification Number to use rather than you SIN, you should immediately stop contacting that company.

Last, but not least, credit repair services that say you should argue about everything in your credit report are just wasting your time. In fact, avoid all companies that even hint at doing anything illegal.

It is important to understand that if you supply false information when applying for credit by phone or mail, you can be prosecuted for wire or mail fraud. Under Canadian law, lying on your application for credit, lying about your SIN or fraudulently applying for a new SIN from Revenue Canada are all federal crimes. Under the Credit Repair Organization Act, credit repair companies are prohibited from requesting payment from consumers before they have fully delivered on all promised services. In other words, any credit repair company requesting upfront payments is in breach of the law.

Under the Credit Repair Organization Act, credit repair companies are prohibited from requesting payment from consumers before they have fully delivered on all promised services. In other words, any credit repair company requesting upfront payments is in breach of the law and is not acting ethically.

The best possible way to avoid poor credit history, and totally keep you safe from fraudulent credit repair services, is to do a periodic credit report review. Reviewing your credit report is important because the information in your report affects your chances of getting an insurance or loan. Make sure that the information is correct, complete and regularly updated before applying for a loan. Lastly, by doing periodic check-up on your credit report, you can be safe from identity theft, which can create a major problem not only in your credit report.

by Dominion Lending Centres Mortgage Excellence

About the Author:

Experience first hand the power of a Mortgage Expert with Dominion Lending Centres Mortgage Excellence. Edmonton and surrounding area is fortunate enough to have this Expert

What is a FICO Score

admin — Thu, 23 Jul 2009 05:13:13 +0000

Your FICO score is a vital component of managing your finances. This is the number used by the credit bureaus to determine how good your credit is. The FICO scoring system can appear to be pretty complicated if you do not know how it works. On the other hand, if you know how your FICO score is calculated, you can easily find ways to keep a good score or repair a bad one. Understanding your FICO credit score is key to maintaining good credit and keeping yourself afloat.

The first thing you need to know is the basics of how the FICO system works and what qualifies you for good or bad credit. The highest score you can get in 850. This should be common knowledge but I have been surprised time and time again at the number of people that don’t know this basic thing. If you did not know, don’t worry. After today, you’ll know a lot more than most. The ideal range for your credit score is 720 to 850. This is extremely good. Again, don’t worry if this isn’t you. If you score is about 675, you are still in very good shape. If it’s below 675, there may be some trouble borrowing money in the future. 300 is the lowest.

This FICO score is compiled by many different factors. 35% of your credit has to do with your punctuality of making your payments. Any payment that is more than 30 days late is reported to the credit bureaus and a lower score is the result. 30% of the FICO score is dependent upon your total debt. This means the ratio of your revolving debt. Still confused? Revolving debt is a credit card. Debt that is always available in a certain range. The ratio is how much debt you still have in comparison to the limit on that line of credit.

15% of the FICO score is based on how long you have had credit. Not only credit in general, but also a particular line of credit. If you have a car payment and have made regular payments for the last three years, this is actually better than paying it all off in cash. At least for your credit score. There is a point of diminishing return though so this isn’t always the smartest move.

There are also a couple of unique things that can affect you credit score such as how much money you owe to a court judgement or money you owe on a tax lien. These have much larger penalties, as does any kind of bankruptcy as you could imagine. The number of accounts you have open also affects your score even though it may improve the debt/credit ratio. Each time you make an inquiry on your credit, it also affects your score. Some pulls hurt more than other though. For example, if you are checking your personal credit, this is considered a soft pull and won’t really affect your score.

by Caton Hanson

About the Author:

Caton Hanson is an expert in FICO scoring. Visit him at Utah SBFC Law Group, and visit his colleague at Utah SBFC Law Group Jody.

Basic of FICO Scoring

admin — Thu, 23 Jul 2009 05:10:03 +0000

FICO scoring is a system that lenders and underwriters use to determine what your interest rate on a loan is going to be. If you buy a house or car, the mortgage or the loan is determined by you credit report and your FICO score.

That score is based on the FICO model and the interest you pay, as well as your monthly payment, is based on what your personal credit score number is.

Just as with a car loan or house loan, you FICO score determines your interest rate. Something most people do not know however, is that a FICO score can also affect your chance of finding new employment, which is increasingly important in the current economy.

FICO scoring is calculated from a multitude of different credit data and it is grouped into five different categories.

We will include in every category a certain percentage to give you an idea of the importance each area plays in determining your personal credit score.

Payment history (35%)

Your payment history is the largest factor in determining FICO scoring. This includes the number of unpaid bills you have, any bills sent to collection, bankruptcies etc. The more recent the problem, the lower your score.

Outstanding Debt (30%)

How much of the total credit line is being used on credit cards and other revolving charges? High balances or more precisely, balances that are close to your credit limit can negatively affect your credit score. Most lenders think 40%-60% of maximum is ideal.

Length of your credit history (15%)

How long have your accounts been open? High loan amounts that you have paid as agreed and have had open a long time work best. Closing old accounts can have a negative affect because it makes your credit history appear shorter.

Recent Pull of Credit (10%)

Every time you apply for any kind of credit you create an inquiry on your credit report. A lot of inquiries negatively affect your credit score. However, ordering a copy and checking your own credit report or personal credit score counts as a soft inquiry and does not go against your score.

Credit Types (10%)

Is your credit from a car loan or a mortgage? If it is a mortgage, how much do you currently owe compared to the original amount loaned. How many accounts are open. It is not always beneficial to open a new account to receive more available cred

by Caton Hanson

About the Author:

Visit Caton Hanson, who is an expert in FICO Scoring: SBFC Law Group Ut or SBFC’s homepage at SBFC Law Group Ut Home.

How To Fix Your Credit Score

admin — Thu, 23 Jul 2009 05:05:34 +0000

One tenth of Americans face the problem of having bad credit. If you’re one of the 10 percent and you are desperate to find a way to fix your credit score, there are a few methods that will surely help you in the process.

The first step you will need to take is fixing your bad credit is to find what is the cause of bringing it down in the first place. You can often get your credit report for free and if you want the additional credit score (though not necessary) is only about eight bucks. Each of the three reporting bureaus give you a free credit report annually.

Anyone in debt should first be aware that there is no perfect solution to fixing your credit; no legitimate ways if you will. Stay away from mediators that make “promises” to solve your bad credit through loopholes and such. There people are misguiding and usually put you in a worse credit position than you started in because you just used your credit card to pay them. This can get you in a heap of trouble. So, it is wise to seek professional advise from a law firm or similar to truly fix the issue.

It is vital to cancel all the credit cards for the sake of fixing up bad credits. If you cannot move on without credit cards then you can keep a one card but make sure to use it only for emergency purposes. One of the biggest disadvantages of having poor credit scores is that you can face problem in getting credits in future.

Debtors must be honest to themselves. They must accept that they are going through a terrible financial crisis and spending unnecessarily can worsen their situation like hell. One can slowly fix up credits by cutting out extra expenditure and increasing the income. Lenders make a special check over the gaining capability and expenditures of the applicants before lending money. This is done to assess if the borrowers can pay off borrowed sum or not.

It is important for the borrowers to make a special check over if the credit report is erroneous or not. Around 40% credit reports have flaws in them and so the borrowers must write to the credit bureaus about potential errors in their credit report. You must email all the details to the credit bureau by only a licensed mail so as to keep a track of the official who is handling the case of fixing up flaws in your credit report.

It is legitimate right of the borrowers to add up such details in their credit report that can improve their credit rating. This extra information can range from complete repayment of a loan to salary increase. One must make a special check over if the authentic details that can boost up credit rating are included in the credit report or not.

by Jody Greggins

About the Author:

If you need help fixing your bad credit, visit a specialist from SBFC at SBFC Law Group Utah or SBFC Law Group Utah Caton Hanson.

Get Approved With Bad Credit

admin — Thu, 23 Jul 2009 05:03:40 +0000

Every now and then, people find themselves in the sticky situation of needed extra cash for a number of reasons. Whether it house repairs or paying off some credit card for which you are in over your head. If this describes you, you may need a company that will offer a personal loan with bad credit. Usually, having bad credit scared people away from even trying for a loan because they think they are not worthy of it. Here’s the thing, spending in today’s market is at an all-time low, so bankers have developed programs now for people just like you and are waiting for you to walk in the do. But, you must be careful. It’s possible to get burned also.

If you already know the amount of money you need, then your next step is to fill out a credit application at a local lender. Those with a low credit score always feel they have no chance at receiving the loan even if it’s one of those special loans designed for those with bad credit. What they do not know is that in order for a lender to make any money in his business, he has to first lend out money. They make their money on the interest that you pay, so some of the lenders will look specifically for people who have poor credit in order to help them get back on their feet financially.

In this country with the consumer buying being down and the economy being terrible, lenders are now less focused on your past they are m ore interested in getting you back on your feet so that you can earn more. They are ready to approve you into one of their personal loan with poor credit people.

When you are looking for a loan program you will find that there are many kinds out there, however, you would have to search thousands of companies just to find just one that will help you to get a personal loan with poor credit. Though this is sometimes the case there is an alternative for those people who are trying to get a personal loan with poor credit. You may look for companies located on the Internet that will provide you with the information you need to get you financed.

Many of these companies that offer the low credit personal loans have their own websites and it is quick and easy to get yourself approved and out the door so to say. There are also many customer service places you can go that can help you to choose the right program. On the programs online, you can get yourself pre-approved in a matter of minutes rather than waiting forever in a long line at your local lender, who may or may not be able to help you anyway.

by Courtney Rogers

About the Author:

Visit Courtney Rogers’ hubpage about getting a loan at SBFC Law Group Loans and also visit our affiliates at SBFC Law Group Loans Utah

How To Repair Bad Credit

admin — Thu, 23 Jul 2009 05:03:04 +0000

One of ten Americans face the problem of having terrible credit scores or credit reports. If your one of them and are searching for a program to repair bad credit, and are a few good solutions for you to look into.

Step one of bringing your credit back up is to do some research and find out what it was that was bringing you credit down. To do this, simple request a credit report from each of the three reporting agencies, Equifax, Trans Union, and Experian. They all offer free credit report once a year. If you want the credit score, it’s an extra eight bucks.

It is essential to cancel most of your credit cards in order to fix the issue. If you can’t function without one, then only keep ONE and make sure to keep in only for emergencies. The big problem with having a bad credit score is that it makes it harder to get that credit card you may need down the road.

It is your right, and I will add your responsibility, to make sure everything that could raise you score is included in the report. It is not just simply looking for bad marks and making sure they are legit. You can also make sure your earnings are correct. If you had a recent pay increase, make sure it’s there and if not tell the bureau. If you have paid off a loan completely but it still appears let someone know.

by Jody Greggins

About the Author:

If you need help fixing your bad credit, visit a specialist from SBFC at SBFC Law Group or SBFC Law Group Caton Hanson.

Credit Repair Help – Here’s How To Start Right Now!

admin — Wed, 22 Jul 2009 19:13:20 +0000

It’s hard to live with bad credit. You need credit to lease a house or car. Most loans you apply for will be turned down with bad credit. It can be frustrating to have bad credit. You need credit repair help.

It’s not that hard to get your credit repaired. All it takes is a little time and a little effort on your part. You must be diligent with your spending and take a few simple steps. Repairing your credit will not happen overnight.

First thing to do, must do is create a budget. This will allow you to know how much money each month you can spend on your debts. It’s best if you document for one month your spending habits. You never know how much you spend eating out and buying fancy coffees.

Equifax, Experian, and Trans Union are the three credit reporting agencies that report to FICO. FICO is who keeps your credit score and reports it to the banks. You should get a credit report from all three agencies. Your bank will give you a free report every year if you ask for one; otherwise you can find an online solution.

Contacting the creditors is the next step. You need to speak to them to offer a payment plan. They will be willing to work with you because they want the money owed to them. If you offer to pay off the full balance and settle right then and there, usually they will give you a discount and ask you only pay the principal. Any agreements should be mailed to you in writing.

Now you need to close out and pay your credit card debts. Destroy the cards and start paying them off. The best idea is to close all the accounts you have except your three oldest ones. You see, credit scores are based on the account history as well as other factors. Even if these lines of credit are opened, you don’t need to use them unless it’s an emergency.

It seems simple, but pay the bills on time. This will be the best thing for your credit. The collections and creditors are willing to work with you and understand the situations you may be in. Any payment for the month is good, if you cant afford your full payment, you can still give them a good faith payment of as much as you can afford. This will at least show you attempting to work with the creditors.

by Mark Alison

About the Author:

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