Credit Problems? Time For A Clean Credit Report!
It is so easy for people to judge others who have Credit Problems. They may have a Clean Credit Report and have never faced a life circumstance that turned your financial world upside down. But you can’t think about that nor worry about it. Whether you used your credit cards with reckless abandon or you faced a horrible situation such as being laid off, divorced or a medical problem-it is ok. There is a chance to fix your credit in the near future. If only these individuals would learn not to spend money that they do not have then their finances would never reach a state of ruin. It is too easy to be on the outside looking in and offering these simplistic explanations. There is so much more to the story.
Why should you repair your Credit Problems?
There are several reasons why you really need to be proactive and start to begin the process of getting a Clean Credit Report.
1-Saving money on interest – When you have a low credit score, you will pay more in interest on all loans you have. This can add up to thousands and thousands of dollars in even one year.
2-Lower Insurance Rates – Do you realize that when you have a low credit score, you pay more for even auto and home insurance? Part of the underwriting process is to check credit and it is an automatic higher premium. Even if you have a perfect driving record, you will pay more!
3-Higher Security Deposits – Cell phone companies, utility companies, internet companies etc will check credit to determine a deposit. The worse your credit is, the higher a deposit you will have to pay. Usually after 12 months of on time payment, you will get your deposit back.
4-Paying Cash – There is nothing wrong with paying cash for everything and this is a goal to shoot for but what happens when the car breaks down or you have an emergent need and do not have the cash available? With a low credit score, you will be unable to qualify for credit. You should always have an emergency back up and this is a huge reason to correc those Credit Problems and shoot for a Clean Credit Report.
5– Purchase Power – Lets face it. Having bad credit either makes it impossible to purchase a car or house. It can even make it impossible to rent an apartment! Why continue to deal with that vrs just starting the credit repair process?
6- Positive Factor – Think of how much better you will feel when you have great credit and don’t have to always worry about what may happen next. This is huge.
Well Then Where Do I Begin?
Read the posts here on Improve Credit and this one on Credit Disputes. It will help guide you in the right direction to start on the path to having a Clean Credit Report and ending your Credit Problems.
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5th Jan 2010
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Posted by admin, and filed under Credit Report, Credit Score
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The FICO scoring model looks at more than 20 factors in 5 categories.
1. How are your bills paid? 35 percent
What is most important is your past history of paying your bills. Do you pay on time? Do you pay late? Do you pay them late consistently? The biggest emphasis is on the recent history so 10 late payments 6 yrs ago will not have the impact that 1 late payment in the past year will have. Accounts that have been sent to collection is worse than late payments and declaring bankruptcy is the ultimate negative on your report/score.
2. The amount of credit you have vrs the amount charged. 30%
A whopping 30% of your score is determined by this which is good and bad. Good because it is something you can work at the make an immediate increase in your score. Bad because many people can’t just pay down their debt at will so they can’t do anything to improve their score on this front.
What they do is look at the available credit you have and then how much you have charged. So if you have $20,000 and have $15,000 charged to those accounts, you’re using 75% of your available credit. This is not good. They want to see it under 30% to give you the best boost in your credit score.
They do look at other factors such as car loans, mortgages etc as well but it is the credit card ratio that can really kill your score.
People who are always near the max of their cards limits are perceived as a much higher credit risk.
3. Age of credit history 15%
Unfortunately, there is nothing you can do to change this or alter this. The age of your credit is what it is. The older your accounts are, the better. Keep this in mind before you close an old card that you don’t use. It is better to keep it open and use it yearly and pay it right off to keep it active.
The third factor is the length of your credit history. The longer you’ve had credit — particularly if
4. Types of credit 10%
What they want to see her is both revolving credit and installment credit. Revolving credit is credit cards while installment is a set amount that you pay down and when paid down, the loan is closed-like a car loan or mortgage.
5. Applying for credit 10%
Every time you apply for credit, you will see an inquiry on your report. Generally, each inquiry will lower your score slightly. But more than that, if a potential creditor sees you have recently requested credit from several other places, they are much less likely to approve you. The FICO model does allow for you to do some comparison shopping for something like a car. If you go to several dealerships to see who can give you the best rate, as long as they are within a short amount of time (a few days), they will only ding your score for one inquiry. The final category is your interest in new credit — how many credit applications you’re filling out. The model compensates for people who are rate shopping for the best mortgage or car loan rates. The only time shopping really hurts your score, Watts says, is when you have previous recent credit stumbles, such as late payments or bills sent to collections.
Now it is important to understand that credit reports are not perfect. They do contain errors and it is up to you to check your credit report and check carefully for any errors.
If you believe you may be in the market for a new car or mortgage, you should check your report a few months before so you can fix any errors you may find. There is nothing worse than finding what you want and then have your credit bite you.
TaTaa
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31st Dec 2009
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Tags: Credit Score
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FICO has extended a special to get your credit report and FICO score at 26% off by using the code listed at the end of this email.
To take advantage of this special click here. When you get to the page, click on tab shown in image below:
On the next page, click as shown below:
Now, you will follow through and select the report/reports you would like. When you get to the check out page, enter the code 26Until2010. The cost will only be $11.80 vrs the nromal $15.95 per report so jump on this now. Perfect report to get at the beginning of your process of Credit Repair and Improving your credit so you can see what your real FICO score is before you start your disputes.
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29th Dec 2009
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Posted by admin, and filed under Credit Report, Credit Score, Credit report disputes, Fix Credit, Improve Credit, Pulling Credit Report, Rebuild Credit
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How To Improve Your Credit Score?
It isn’t always easy getting those bills paid and now you know there is damage but wonder what steps you can take to improve your credit score. Even if your credit score is ok, you can only benefit from taking a few steps to raise your credit score. The higher your score, the lower interest you will pay on your loans. If buying a home is in your horizon, you especially want a score as high as you can get it. The very first thing you need to realize is you can improve credit. You should understand you are not alone. In the US, there are over 30 million people with credit problems severe enough that obtaining a loan or a credit card would be very difficult, if not, impossible. You can, however, take some steps to change your score.
What Is Your Credit Score?
The first step you need to take in fixing your credit score is to know what your scores are today. See pull credit report for details on how to pull your credit report and where to pull your credit report from. Now, your score will range from 350-850. Remember that with some simple steps, you will start to see your credit score rise.
1) Pay down your credit card balances. Your goal here is to reduce your credit card balances so you have are using less than 30% of your available credit.
2) Lightly use your credit cards. It is important to use your cards but use them lightly. Also remember that credit card companies report balances are different times each month and it is rarely right at the due date. So if you rack up a big balance and plan on paying it off, you need to realize that the account may be reported while the balance is high, therefore reducing your credit score.
3) Verify your credit card limits. If your credit card lender is a limit that is lower than you actually have, this may have a negative effect on your score. If it is incorrect, make a quick call to your lender and they should be able to update your credit limit with their next update to the CRA’s.
4) Get out that old card. The older your credit history is, the better it is for your credit score. So it is very important to not stop using your oldest cards. If you stop using the cards, the card issuer may stop reporting updated information to the credit bureaus. So use the card every few months and then pay it off when the statement arrives.
5) Get some goodwill love. Some people believe this is easily achieved and others have had no success but it is still worth a try. If it works for you-great. If not, you have only wasted a short amount of time. If you have a good history with the lender, they might agree to delete a late payment from your credit report. Your goodwill request should be made in writing. Another solution for accounts that have a serious history of late payments etc is to ask that they be “re-aged.” If you have an account that is open, your lender may agree to delete any prior delinquencies as long as you make several payments on time. Be sure to get any agreements in writing.
6) Credit Disputes. When you get your credit report, you should go through it carefully and dispute items that you don’t agree with. I always suggest you mail your dispute certified return receipt. ALWAYS. You can simply dispute using the reason ‘Not Mine’. The older the negative item, the easier it is to get removed. Also a small amount is one that some lenders do not bother taking the time to investigate, therefore they do not respond to the credit bureau within the 30 day time limit and the item must then be removed from your credit report. If you have credit with a lender that has joined another company, you may have more success as oftentimes the merge creates a mess of their records and they can’t verify the loan. Credit Disputes can rapidly improve credit.
7) Blast significant errors. Credit scores are calculated off of the information from your credit report so it is important to really check carefully. You should realize that there are many items in your credit history that do not impact your credit score.
Things that do improve your credit score and are worth disputing or correcting:
- Charge-offs, late payments, collections or items you find on your credit report that are not yours.
- A lower credit limit than you actually have.
- Accounts that show “paid charge off”, “settled,” “paid derogatory,” or other labels other than “paid as agreed” or “current” if they were paid in full and on time.
- Accounts you listed in a previous bankruptcy but are still showing as unpaid.
- Items older than 7 years and are showing negative status.
Things you really don’t need to worry about includes:
- Your name is not spelled right. (unless there is a concern for identity theft)
- An old address or an incorrect address.
- Incorrect employer information.
- Account that is closed but is listed as open. (don’t fix this, leave it showing as open as this is better for your score.)
Other actions to beware when you’re trying to improve credit scores:
- Don’t ask a lender to reduce your credit limit. Lowering your credit limit, will reduce the available credit that is so important. Remember you need to keep your balances under 30% of your total available credit. This value is worth 30% of your score so it is important to follow this.
- Don’t make a late payment. If you have a bad credit history with a lot of late payments, adding another one isn’t going to hurt your score much but since the goal here is to improve your credit score, you need to avoid any late payments at all. When your score gets in the 700 range, one late payment can lower your score by 100 points!
- Consolidating your accounts. You need to be careful when doing this. Remember you need to keep your total utilization of credit down under 30% so whether you have one card maxed out but all others are open or small balances on several cards, keep that number under 30%.
- Don’t apply for new credit, if you have plenty. If you do not, you should get an installment loan if you do not have any. Remember to have a variety of loan types.
Improving your credit is easier the lower your score and the older your negative items. Once your score reaches the 700 range, you are in a good zone and probably won’t benefit much but you should always pull your credit reports at least once a year and review it for any errors. Paying attention to the above items can help you Improve Credit right away.
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26th Dec 2009
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