Improve Less Than Perfect Credit Score and Repair Credit Card Debt
Article by New Credit Applications
Improve your credit score by repairing credit card debt even if you have less than perfect credit. Alleviating credit card debt is the best way to repair your credit score and improve your less than perfect credit. Once your credit card debt is repaired your credit score will improve thus allowing you to once again obtain new credit cards and receive instant approval online.
There are five simple steps to improve less than perfect credit by repairing your credit card debt. Following these simple steps to repair credit card debt can improve your credit score by nearly a 100 points.
The first step to improve your less than perfect credit score and repair credit card debt is to obtain a copy of your credit report. Pull your credit report from all three bureaus to see what is negatively impacting your credit score. You can obtain a free credit report annually from http://www.annualcreditreport.com.
The 2nd step is to reduce the number of credit collection accounts that are negatively impacting your credit score. These negative credit marks will hurt your chances of obtaining a new credit card. After reviewing your credit report write a dispute letter to each credit card bureau (Experian, TransUnion, and Equifax) via certified mail. Dispute every credit collection or negative credit card account that is listed on your credit report even if the account are in fact legitimate. Credit card companies and creditors have 30 days to respond to the bureaus to state that the negative items are in fact owed by you. If they do not respond they have to drop the negative credit accounts or collection items from your credit report thereby improving your less than perfect credit almost instantly. It’s also best to send in dispute letters during holiday months when they are understaffed and overworked. You can also request that any old accounts (older than 7 years) be removed from your credit report. They have to do this by law, but don’t have your oldest credit card account removed if it’s not negatively affecting your credit score. The longer you have established credit the higher your credit score will be. This ultimately will improve your less than perfect credit by boosting your credit score significantly. Most people experience a 100 point increase in their credit report from this step alone.
The 3rd and most important step in repairing your credit card debt is to establish two new lines of credit instantly. There are several new credit cards to choose from with different perks and APR’s. You can compare new credit cards and complete a new credit card application online http://EasyCreditApp.NewCreditApplications.com/ for instant approval on most applicants. Applying for new credit can initially lower your score by just a few point due to the number of inquiries that post to your credit report so only apply for credit cards that you have a better chance of obtaining. You can start with a prepaid visa that has a built in credit builder program designed for people with poor credit.
The 4th step in repairing less than perfect credit is to maintain a good standing with the new lines of credit you recently obtained from New Credit Applications. As a rule of thumb its best not to purchase anything on credit that you will not have when the credit card statement arrives or only charge something that you pay each month anyway like your electric bill. Charge it and then pay it off as soon as the bill arrives. Don’t use your new credit cards for anything else. Put them in a drawer and forget about them. Remember the key is to keep them in good standing not to charge things that you cannot afford or that you will not be able to pay for in full when the bill comes in. Learning responsibility can also play a key role in repairing your credit card debt. Which most of us learned the hard way and believe that once we are able to get a second chance we will look at credit in a whole new way.
The 5th and final step is to routinely monitor your credit report and credit score. Your FICO score is the most important number that your creditors see when deciding your credit worthiness. My personal favorite is http://www.myfico.com for the best score watch system that is available today. You can also obtain your score for free at http://www.creditkarma.com, but it varies from the official FICO credit score.
New Credit Applications is committed to helping those who don’t have a credit card or who have had credit lines taken away in the past. Easily apply online for instant approval for the credit card that most fits your needs!
You may also be interested in WalletHub, which recently became the first and only website to offer free credit scores and full credit reports that are updated on a daily basis.
Credit Repair and Credit Scores Explained
Article by Ian Webber
The Credit Bureaus
Many people starting a credit repair program are under the misconception that the credit bureaus are in some way connected to the government. It is easy to understand this perception. But, as influential as they are, the credit bureaus have no government blessing, charter, or otherwise. They are big business. There are three credit bureaus that count. They are Experian, Equifax, and TransUnion. They are in the business of gathering credit data about you and selling it to potential creditors.
The Fourth Contender
There is one other credit bureau of substance called Innovis. Innovis is a significant player in the credit data markets, but is not a concern for your credit repair effort. They specialize in gathering and sorting data for pre-screened credit card offers. The mortgage giants Fannie Mae and Freddie Mac were instrumental in the accent of Innovis when, in 2001, they demanded that their mortgage servicers report payment histories to Innovis. At the moment Innovis operates behind the scenes, but there have long been rumors that they are planning an assault on the consumer market.
The Credit Score of Choice
Almost without exception lenders use a single type of credit score in making loan decisions. This is called the FICO score and will become a focal point of your credit repair project. FICO is an acronym for the inventor of the score, Fair Isaac and Co. The three bureaus sell these FICO scores directly to lenders and have re-named them for marketing reasons; Equifax calls it a BEACON score; TransUnion calls it an EMPIRICA score; and Experian calls it the EXPERIAN/Fair Isaac Risk Model.
Your Scores May Vary
At the outset of your credit repair project you may want to benchmark your effort by checking your credit scores. You will notice that your scores with the three bureaus are different. This is because each bureau receives data from a different mix of creditors. Some creditors report to all three bureaus, but many don’t. If you examine your three reports you will see that some accounts are missing on each bureau. Reporting schedules also play a roll. Changes in your balances are normally picked up sooner at one bureau than another.
The Makeup of Your Score
The precise formula for calculating your credit score is kept secret. But Fair Isaac offers a significant amount of information about the rudiments. If you are looking for credit repair results it is wise to familiarize yourself with the basics. As you start to work on optimizing your scores you will begin to develop an intuitive grasp of the nature of the scoring model.
Payments
Your payment history comes first and plays a major roll. This includes installment and revolving debt payments. The age of each derogatory event reduces the impact it will have on your score. For credit repair purposes, don’t worry about the past, just make sure that you make all payments on time from now on and you will be fine. Fair Isaac says that this category represents 35% of your score.
Balances
Your balances are the next category, and although in second place, they may be the most important to your credit repair project and to any effort you are making to optimize your scores. Revolving balances carry the most weight, and the relationship between your balance and the limit on your revolving accounts is the key. Installment balances come into play as well; older, time-tested installment debt will help your scores. Fair Isaac indicates that this category makes up 30% of your score.
Age
The age of your credit plays a role as well. New credit will depress your scores for the simple reason that it is untested. You may need to build new credit as part of your credit repair project, but as each month passes the negative impact of new accounts fade quickly. Old accounts are a credit repair asset and should be preserved. This category makes up 15% of your score.
Inquiries
Credit inquiries have a negative but small impact on your scores. Inquiries indicate to the FICO model that you are planning to incur new debt. Fair Isaac credit score engineers will lower your scores temporarily when you have inquiries as a warning to prospective lenders that your budget may be facing new challenges. The impact of inquires fade quickly. Fair Isaac weighs this at 10% of your score.
The Right Mix
Last and least, the type of credit makes up the final 10% of the score calculation. This last category brings to light the fact that there is an ideal mix of debt types for credit score perfection. Fair Isaac does not reveal what the perfect mix is, but when it comes to credit repair success you should focus on building a nice balance of accounts, making your payments on time, and keeping your revolving balances down.
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Categories: Credit Score Articles Tags: Credit, Explained, Repair, Scores
Info about credit score,housing loan,credit check(whats my credit score)
Article by Shane Lee
This article is about questons like: the credit score and mortgage, credit score and loan, whats my credit score, how to check my credit score, etc.
In the U.S., every one has a social security number (SSN). This SSN will follow you for your entire life. If you screwed up something, it will be reported to the HOGAN system. This system is so powerful that all the info about a person’s debt, credit card number, bank accounts, etc can be inquiried from it once a SSN is entered. One thing I need to mention here is the credit card late payment issue. If you have only just one late payment (less than 90 days), maybe your credit score is not going to be affected. But for a late payment of more than 90 days. It will be a big problem for your credit score and credit report. Sometimes you will get a 100 points deduction from your credit score if you make a mistake like this. One of my friends once forgot to pay his credit card bill and this late payment (more than 90 days) made his credit score drop from 708 to 604 in a month. ( you can get more information about “whats my credit score” at Whats My Credit Score Dot Travel2ChinaInfo Dot COM ) When he found this big mistake he made, he paid his credit card debt immediately. But it still takes a while for him to restore his credit score. Actually, the people paying all his credit card debts every month will not get the high credit score. You credit score will be better if you just pay the minimum payment every month. Because you will need to pay for the interests if you choose to pay the minimum payment of your credit card bills. This is the way the banks and credit card companies like most. It is like a debt which takes forever for the credit card holder. But lots of American people like to pay the credit card bills this way.:-)
About the credit check and credit inquiry: I don’t recommend people to apply for too many credit cards in a short period of time. Because you will get a hard credit inquiry every time you apply for a new credit card. You credit score will be affected if you have too many credit inquiries. In the U.S., every one can get a free annual credit report (with no credit score in it) and the web site is: annualcreditreport dot com (The AnnualCreditReport Dot com website is only accessible through ISPs (Internet Service Providers) located within the United States and its territories.) You can check this web site if you are interested. If you have the question like “whats my credit score?”, you can use the free trial from CreditReport Dot COM or MyFICO Dot COM. From CreditReport Dot COM, you can get a 7 day free trail of 3 bureau credit monitoring and credit score tracking. For the MyFICO Dot COM, you can get your free FICO score and credit report, 2 free Equifax FICO scores and credit reports, 90% of the largest U.S. banks use FICO scores. (Score Watch 30-Day Free Trial)
Credit score and financial crisis: I think a very important reason of this financial crisis is the banks’ not caring too much about the applicants’ credit score. Because of this, the people with very low credit score can still get their housing loans. Even the people who has bankruptcy records in his/her credit report can still get his/her house mortgage. Sometimes they can get the 0% down payment too. This is too risky for the banks. When the housing price drops, these people will not be able to pay their housing loans and the banks will be affected too. Now the banks require the applicants to have a credit score of at least 700 when applying for the housing loans. They also prefer the applicants with a clear credit history. Although the housing price dropped and lots of people think this is a good time to buy houses, to get the house mortgage from the banks is another story now. ( you can get more information about “whats my credit score” at Whats My Credit Score Dot Travel2ChinaInfo Dot COM )
Credit score and microfinance: I once had a intern in Grameen Foundation and my work is about the loan applications from the poor people. In the U.S., the poor people will not get a very good credit score. (or don’t have any credit score) Because of this, the banks do not want to lend them money. All they can ask is the microfinance organizations. I saw lots poor people, they really need money from the banks. But they are not able to get loans from them because of their bad credit score and credit report. The good thing about this microfinance is that they will not consider things like credit score or credit report at all. It cares more about the applicants’ personality. If the applicant is poor but he/she is honest and condifent about his/her future, he/she can still get loans from these microfinance organizations. In my point of view, this is not just about money. This is about giving hopes and chances to the poor people. Although it is not smart to lend money to the poor people with band credit score in most American people’s mind, the poor people still need a chance to pursuing better lifes in the realistic capitalism system.
By Shane Lee. Date: 06/02/2009.
Copyright belongs to Whats My Credit Score Dot Travel2ChinaInfo Dot COM. You can find more information about whats my credit score, loan credit score, credit score mortgage from our web site.NOTE: Permission is granted by the copyright owner to disseminate this article in whole or in part provided credit is given to the author ( with a link to the article’s source URL Whats My Credit Score Dot Travel2ChinaInfo Dot COM ) and this NOTE is not removed.
About the author: Shane Lee. More flights and airfares info at: Direct flight RDU to BWI. And: Flights from Cincinnati to Las Vegas, and: Airfares RDU Boston.
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Categories: Credit Score Articles Tags: about, checkwhats, Credit, info, loancredit, Score, scorehousing
Whats my tips to get a new credit card (whats my credit score)
Article by Shane Lee
This article is about questions like: how to get my first credit card, whats my credit score, how to check my credit score, etc.
For the people who has a poor credit score or don’t establish his/her credit history yet, it is hard to apply for the loans or new credit cards. Actually there are still some opportunities for these people to improve their credit scores. ( you can get “whats my credit score” info from Whats My Credit Score Dot Travel2ChinaInfo Dot COM )
1. The shopping credit cards from the department stores or shopping malls
Usually, the department stores and shopping malls will encourage their customers to apply for their own credit cards. Although these credit cards can only be used for shopping in these places, they are still the real credit cards, which can help you to improve your credit score or establish your credit history. These credit cards don’t have a high credit limit and they are not difficult to get because of this low credit limit. (the low credit limit means low risks for the companies) You can use these shopping credit cards to gain a better credit score by always paying your credit card bills on time. Once your credit score is improved, you will have much more chances to get loans and other good credit cards.
2. Get your first credit card by opening a checking or saving account first
In the U.S., the big banks have many branches in the big cities. These bank branches provide a lot of services and will love people to open checking or saving accounts in them. They often come to the colleges to do the promotions. For the students who don’t establish their credit history yet, this is a good chance for them to get their first credit cards. Because the purpose of these banks is to absorb deposits, you can open a checking or saving account first. This will help you to get your first credit card. These credit cards will not have a high credit limit of course. But they are still a good choice for the students or people with poor credit history to improve their credit scores. If you are a college student, usually, the local banks will do some promotions at the beginning of each semester. This will be your good time to get your first credit card.( you can get more “whats my credit score” info from Whats My Credit Score Dot Travel2ChinaInfo Dot COM )
3. The credit cards for students
Now the banks and credit card companies pay a lot of attention to the student credit card market. They have many student credit cards now. For those college students, you can find the materials for the student credit card application in the bulletin board of your school. These materials will help your to get your first credit card. Usually, you will need to send your student ID copy, registration certificate copy, tuition bill copy, etc to the banks or credit card companies. These will prove your pupilage and you will have a good chance to get your student credit card from them.
4. Find a cosigner
Why is it hard to get a new credit card for the people who has a poor credit score or don’t establish his/her credit history yet? Because it is risky to give them credit cards when the banks and credit card companies are not sure whether they will pay their credit card bills on time or not. In this case, you will get your new credit card much easier if you can find a cosigner who has a very good credit history and credit score. He/She will be responsible to pay your credit card bills if you don’t do it on time. You can use this method to establish your own credit history or repair your credit record. When your credit score is better, you can apply for your own credit cards (without cosigner) then.( you can get “how to check my credit score”, “whats my credit score” info from Whats My Credit Score Dot Travel2ChinaInfo Dot COM )
5. The pre-approved credit card
Sometimes, you will find some pre-approved credit card application materials in your mail box. Because they are pre-approved credit cards, you will get them for sure if you submit your application. But these offers are usually sent to the people with good credit history and credit scores in my point of view. I never receive these kind of offers when my credit history is still very short. Now my credit score are very high and I receive these kind of pre-approved credit card offers every week.
6. Credit card from the credit union
My first credit card is a Mastercard from a credit union. You will not be able to get a very good credit card from them, like 5% cash back, $ 100 bonus, travel insurance, etc. But these credit union credit cards are not difficult to get and they can be your good choice to establish your credit history or improve credit score. By the way, the credit limit of these credit cards are very low. I only get a $ 500 credit limit for my first credit card. Now I have a $ 6000 credit limit discover credit card. But my request for the credit limit increase of my first credit is still rejected by the credit union.:-)
By Shane Lee. Date: 06/12/2009.
Copyright belongs to Whats My Credit Score Dot Travel2ChinaInfo Dot COM. You can find more information about whats my credit score, loan credit score, credit score mortgage from our web site.NOTE: Permission is granted by the copyright owner to disseminate this article in whole or in part provided credit is given to the author ( with a link to the article’s source URL Whats My Credit Score Dot Travel2ChinaInfo Dot COM ) and this NOTE is not removed.
About the author: Shane Lee. More flights and airfares info at: Direct flight RDU to BWI. And: Flights from Cincinnati to Las Vegas, and: Airfares RDU Boston.
Credit Scores and Mortgage Loans
Article by Pink Realty
In today’s economy, it’s becoming more and more difficult to get your bills paid on time. After a few late payments, you may wonder what the impact is on your credit report and your credit score. Whether you have lost a job, gone through divorce, lost a spouse, or dealt with a serious medical issue, you know that any hardship can wreak havoc on your financial responsibilities. You are not alone, and we at Pink Realty help people who have dealt with these all the time. More than 43 million people in the United States have credit issues that are severe enough to make obtaining credit with reasonable terms very difficult. If you want to repair your credit and improve your score so that you can buy a home, there are some things that you should understand.
If you are looking to buy a car, auto credit scores range between 250 – 900. If you are looking to purchase household furniture or other goods, a consumer credit score is between 300 – 900.
The economy, with its high unemployment rates and increased cost of living has made it virtually impossible for the average person to maintain perfect credit. The sum of this equation has about 40% of the people who are trying to qualify for a new home loan are being denied for a mortgage.
These days in Colorado Springs, the agents at Pink Realty see that about 2/3 of the real estate listings are either short sales or REOs and 40% of the people trying to buy a home, can’t qualify. Are you one of the 40% that wants to buy a house but you can’t because your credit score isn’t high enough? What can you do about it? We’re going to take a look at what the credit score requirements are for the different types of home loans and then we’re going to address some important credit report facts so you can create your own credit report action items that will help you succeed in getting that mortgage for your dream home.
We’re going to take a look at what components makes up your score and give you some tips on how you can raise your score in the fastest amount of time.
Below is a chart that defines the 5 components that comprise your FICO scores (credit score). 35% of your total score is determined by past delinquencies, 30% by your revolving credit-to-debt ratio, 15% on the average credit age, 10% based on credit mix, and 10% on credit inquiries. Past delinquencies weigh the most heavily on your total score, which probably makes you think you should pay off all past delinquent accounts. This is not necessarily so. Depending on the age of older past due delinquent accounts, it isn’t always best to pay them off. Bad debts can only stay on your credit report a maximum of 7 years from the date of last activity. If you pay them off, the account will show paid, but the derogatory status remains and the account will now stay on your report for a maximum of 7 years from the date you paid it off. Therefore, check the dates on older past due accounts, charge-offs or collections. If the accounts are from several years ago, they will fall off your report on their own soon enough. Remember, the maximum amount of time information can remain on your report is 7 years. It doesn’t mean they will stay on there for 7 years. If you have extra money and you want to use it to better your credit score, you can pay off some recent charge-offs or collection accounts. While the derogatory status will stay, the account will show paid. Once older past due accounts drop off your report, your score will automatically improve.
The next big bang on your credit report is your revolving credit debt ratio. There are a lot of myths about credit cards and how they impact your credit score. Some people think you should only have a couple of credit cards, others think you should combine all credit cards balances into one credit card balance. Some people don’t think you should have high credit limits and some people think if you have a lot of credit cards, but don’t use them, you should cancel them. Finally, some people think if you pay off your credit card every month, you won’t establish credit. All of these are myths. The longer you have had a revolving account in good standing, the better impact it makes on your score. Remember average age of a credit file is 15% of your credit score. Keep those old accounts open! If you have one or more credit cards with high credit limits and manage them wisely, high credit limits can actually be advantageous. If you have several different types of credit cards, including department stores, keep them open. Closing credit card accounts can actually lower your score. But be aware, lenders have started cancelling inactive accounts or lowering credit limits on inactive credit card accounts. 30% of your credit score is determined by your debt-to-credit ratio. The lower your ratio, the better! Therefore, if you have cards that have a high credit limit, but you use the cards conservatively and keep small balances, it improves your score. The rule of thumb is to keep credit card balances less than 30% of the credit limit. For example, if you have a credit card with a 00 credit limit, you want to keep the balance on that account less than 0. The more credit cards you have with a limit and the smaller the balance you keep on those cards, the lower your debt-to-credit ratio is. If you have ‘maxed’ out your credit cards and your debt-to-credit ratio is 95 – 10%, the best way to improve your credit score is to work hard to get the balances down below 30% of the limit.
The older your credit history is the better. The longer you keep and maintain accounts in good standing, the more positively it impacts your score. If you have a credit card account that has been opened for 10 years, don’t stop using the card or the issuer might decide to close the account or stop reporting to the credit bureau. While the information might still be available, it won’t add as much weight to your score. So keep older card accounts active even if it means charging a recurring monthly bill to the account and then paying it off each of month.
While the mix of credit you have on your file only makes up 10% of your total score, it is important for lenders to see how you handle different types of credit. If you are trying to build new credit, one of the best ways is to take out an installment loan. This might be for a car or household goods. Showing that you can make regular monthly payments over time is very important.
Finally we get to inquiries, which also make up 10% of your score. There are two types of inquiries: Hard inquiries and soft inquiries. If you are requesting your own annual credit report or applying for a job and your potential employer is pulling your report, these are soft inquiries and do not impact your score, however, hard inquiries do. If you are shopping for a new car and go to 3 or 4 different car dealerships and each one runs a report, it will impact your credit score. However, the credit bureau system detects the similarities in reports pulled and the 3 or 4 reports will count as only one inquiry. The same happens if you are shopping for a home loan. If 3 different mortgage lenders run your report, it will count as one inquiry. Where inquiries really begin to hurt your score is when you apply for various types of credit in a short period of time. If you are trying to apply for credit cards and buy a car and a house at the same time, the inquiries will not only lower your score, but raise a red flag for lenders!
In summary, we mentioned the following points that can help improve your credit score:
• If you have old past due accounts, leave them alone. Let them age and fall off your report on their own.
• If you do have past due or delinquent accounts that are current, you can pay them off. The derogatory information remains, but the status changes to paid. While this does not impact your score, it is beneficial.
• Pay down your credit cards. Lenders like to see a big gap between your balance and your credit limit. While it makes sense financially to pay down high interest cards first, if you are looking to raise your credit score, it is best to pay down the cards that are closest to their limit! Work to keep a low debt-to-credit ratio on all of your revolving credit card accounts. Keep long standing accounts active, keep high balance accounts open, but use your cards conservatively so your debt-to-credit ratio stays low. If you have high balances on your credit card accounts, you will be most rewarded by paying the balances down until they are less than 30% of the credit limit. This is where you will get the biggest bang for your buck.
There are a few other things you can do to improve your score.
• If you have accounts that are old and due to fall off your report soon, you can contact the credit bureau to dispute the account. If it is old and has a small balance, there is a good chance the collection agency won’t dispute the charge and it will be removed.
• Look for errors on your credit report. If you see accounts that are not yours, dispute them. 70% of the credit reports have errors on them. The chances of there being an error on your report are good. So review your report and if there are errors, dispute them to have them removed.
• Old, past due accounts don’t get discarded because you have new, current accounts. Sometimes time is required to raise your score. Let old bad debts just fall off when they’ve aged. To mess with them will add 7 more years of derogatory information.
• There are a few other things you can do to increase the improvement. If you have accounts that are old and due to fall off your report soon, you can contact the credit bureau to dispute the account. If it is old and has a small balance, there is a good chance the collection agency won’t want to dispute the charge and it will be removed. Other things to consider:
Your credit score is based on the information in your credit report, so check for errors. Some of these errors can really hurt you, so review your credit report thoroughly and look for any errors in the following areas:
• Correct any late payments, charge-offs, collections or other negative items on your report that are not yours.
• Correct any credit limits that are incorrect. If your credit card company has reported a credit limit lower than what it actually is, get it fixed. • Correct any accounts that may be listed as “settled,” “paid derogatory,” “paid charge-off” if you paid them on time and in full.
• Correct any accounts that are still listed as unpaid that were included in a bankruptcy.
• Negative items older than seven years (10 in the case of bankruptcy) that should have automatically fallen off your reports.
• If you’ve closed accounts and they still show open, don’t correct this. Closing accounts can actually lower your score.
• If you are trying to establish credit because you have not credit, apply for a credit card. Charge something small each month, such as a tank of gas or dinner, and pay it off each month. After establishing some credit with a credit card company, apply for an installment loan. It can be a simple personal loan that you can pay off in 12 months. You want to do this to build a mix into your credit file.
Avoid these common credit mistakes when you are trying to improve your credit scores:
• Don’t ask a credit to lower your credit limit because it reduces the gap between your balances and your available credit. The lower the gap, the more it hurts your scores.
• Avoid making late payments. While a missed or late payment will do more damage to a good credit score than it will an already low score, you definitely want to avoid missed or late payments if you are trying to improve your score.
• If you are trying to improve your scores, applying for a new account or additional credit when you already have enough credit can ding your scores, unless you are recovering from a bankruptcy. In this case, applying for an installment loan can help.
• Don’t transfer credit card balances from a high-limit card to a lower-limit one or transfer small balances to a high limit card. It’s better to have smaller balances on a few cards than a big balance on one. Remember the debt-to-credit ratio.
Having good credit and being an educated consumer can save you money. You will get better interest rates and better terms, which saves a lot of money in the long run. Additionally, you can save money on insurance. Know what is in your credit report and know what your score is. Lenders are in business to make money. If you don’t know what’s in your credit report or what your score is, a lender can charge you more. Understanding what’s in your credit report and knowing what your score is can give you bargaining power when negotiating interest rates and terms.
For more information on your credit, how to improve it, or to see what kinds of loans you qualify for, call Pink Realty today at 719-393-7465 (Pink) and ask to speak to our lender. She will gladly help you. Once you are qualified for a loan, one of our experienced agents will help you find your perfect Colorado Springs dream home!
Persons seeking Colorado Springs Homes will be intrigued to learn that tourists from around the world visit Colorado Springs to see the amazing rock formations as well as to experience the popular tourist spots such as Seven Falls, Garden of the Gods Park and the Cave of the Winds. More about these homes will be explained to you by Pink Realty.
Categories: Credit Score Articles Tags: Credit, Loans, Mortgage, Scores
5 Common Credit Score Myths
Article by Darell B. Provost
Your credit score is an integral part of your financial life. It is important that you understand what it’s all about. Lenders, landlords, insurers, utility companies and even employers look at your credit score. It is derived from what’s in your credit reports, and it ranges between 300 and 850. Yet, according to a survey that was recently conducted, nearly half of all Americans don’t know how these scores are derived or even what factors are used to come up with them. For example, if your credit score is 580 you are probably going to pay nearly three percentage points more in mortgage interest than someone who had a score of 720. Or another way of looking at it, if you had a $150,000 30- year fixed-rate mortgage and your credit score was good enough to qualify for the best rate, your monthly payments would be about $890. This is according to Fair Isaac, the company that created the FICO score and who the rate is named after (Fair Isaac COrporation). If your credit is poor, however, it is very likely that you would have to pay more than $1,200 a month for that same loan. With so much depending on the credit score, it’s important to understand what it is all about and what are the things that affect it.Unfortunately, people commonly have a lot of misinformation and misunderstandings about their credit score. Here are five of the most common credit score myths and along with it the true facts:
MYTH #1: The major bureaus use different formulas for calculating your credit score. FACT: The three major credit bureaus – Equifax, TransUnion and Experian — give the score a different name. Equifax calls their score the “Beacon” credit score, Transunion calls it “Empirica” and Experian gives it the name “Experian/Fair Isaac Risk Model.” They all use different names for the credit score, but they all use the same formula to come up with it.The reason that the credit score you receive from each bureau is different is because the information in your file that they base the score on is different. For example,the records that one bureau is using may go back a longer period of time, or a previous lender may have shared its information with only one of the bureaus and not the other two. Usually the scores are not too far from each other. Unless there is a big difference between what each bureau says is your credit score, many lenders will just use the one in the middle for the purpose of analyzing your application. So, for this reason alone it is a good idea to correct any errors that exist in each of the three major credit bureaus.
MYTH #2: Paying off your debts is all you need to do to immediately repair your credit score. FACT: Your credit score is mostly determined by your past performance more than your current amount of debt. It will definitely be very helpful to pay off your credit cards and settle any outstanding loans, but if yours is a history of late or missed payments, it won’t remove the damage overnight. It takes time to repair your credit score. So definitely pay down your debts. But it is equally important to consistently get in the habit of paying your bills on time.
MYTH #3: Closing old accounts will boost my credit score. FACT: This is a common misconception. It’s not closing accounts that affects your credit score, it’s opening them. Closing accounts can never help your credit score, and may actually hurt it. Yes, having too many open accounts does hurt your score. But once the accounts have been opened,the damage has already been done. Shutting the account doesn’t repair it and it may actually make things worse. The credit score is affected by the difference between the credit that is available and the credit that is being used. Shutting down accounts reduces the amount of total credit available and when compared with how much credit you can use your actual credit balances are made to seem larger. This hurts your credit score. The credit score also looks at the length of your credit history. Shutting older accounts removes old history and can make your credit history look younger than it actually is. This also can hurt your score. You generally shouldn’t close accounts unless a lender specifically asks you to do so as a condition for them giving you a loan. Instead,the best thing you can do is just pay down your existing credit card debt. That’s something that definitely would improve your credit score.
MYTH #4: Shopping around for a loan will hurt my credit score. FACT: When a lender makes an inquiry about your credit, your score could drop up to five points. Some borrowers think that if they shop around by going to a number of different lenders that each time a lender does an inquiry it will generate another reduction in the credit score. This isn’t true. For credit score purposes, multiple inquiries for a loan are treated as a single inquiry, as long as they all come within a 45 day period. So it is best to do your rate shopping within this 45 day window.
MYTH #5: Companies can fix my credit score for a fee. FACT: If the credit bureaus have accurate information, there’s nothing that can be done to quickly improve your score if in fact you have a history of not handling your debts well. The only way to have an effect on your credit score is to show that you can manage your debts in the future. Also,if there are errors in your file, you can contact the bureau yourself. You don’t need to pay someone else to do it. Each of the major credit bureaus has a website which clearly explains what you need to do to correct an error. So, the best ways to improve your credit score are: pay down the debt,pay your bills on time, correct existing errors on your credit reports in each of the three bureaus and apply for credit infrequently.
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Categories: Credit Score Articles Tags: Common, Credit, Myths, Score
Are Your Credit Scores Hurting You?
Article by Jordan Crouter
Don’t believe anyone who tells you that credit scores are irrelevant to your financial health. But you also should not believe that credit scores are any reliable indication of your financial health. You can be a multi-millionaire with no credit score or someone with excellent scores who’s on the brink of a financial meltdown. Indeed, economists currently are worried about a steep rise in foreclosures among “prime” customers, those who had good credit when they got their mortgages but who took on too much debt or lost their jobs in the recession. The confusion over what credit scores are, and what they do, leads to some unfortunate attitudes:
– Some people dismiss credit scores entirely, either believing scores have no effect on their finances or out of a general disdain for credit and debt.
– Others understand that scores are important but believe that if they handle their money well, their scores automatically will be good.
– Still others are positively obsessed with their scores, focused on boosting them as fast as possible without considering how their actions might affect the rest of their financial lives.
All of these folks are misguided and could be risking some serious fiscal fallout. Let’s take these myths one at a time.
Myth No. 1: Credit scores don’t matter.
Here’s the truth: Credit scores are increasingly critical to the financial lives of most people.
In today’s credit crunch, only people with good scores are snagging the best rates and terms on mortgages, credit cards and other loans. They can effectively fight back against the credit card rates increases and limit cuts so prevalent today. Meanwhile, many people with bad scores are paying far more for credit or being turned away entirely.
Even if you’ve paid off your home and never plan to borrow another cent, you may still need to be concerned about your numbers. Credit scores are used by insurance companies to determine premiums and by landlords to evaluate applicants. (Employers often review credit information as well, although they tend to look at your entire credit report, rather than just a three-digit credit score.)
Furthermore, you can have great scores without being in debt.
While having installment accounts such as mortgages and auto loans can boost a score, they’re not essential.
You can achieve a score of 750 or above over time just from credit card accounts that you pay off in full every month, according to FICO, the company formerly known as Fair Isaac that created the leading credit scoring formula. In other words, you don’t have to pay a dime of interest to get and keep good FICO scores.
Myth No. 2: Great finances make great credit scores
I wish.
Credit scores were designed to help lenders gauge a borrower’s risk of default. That’s it. The only information used is what’s in your credit report. The formula is particularly affected by:
– Whether you pay your bills on time.
– How much of your available credit you’re using.
– How long you’ve had credit.
– How recently you’ve opened a new account.
– The mix of credit you use.
Here’s what does not go into a score:
– Your income or how much of it goes to pay debt.
– Your net worth.
– Your retirement account balances.
– Your investment returns.
– Your employment history or prospects.
– Whether you live within your means.
– Whether you pay your credit card bills in full each month or carry a balance.
The bottom line: If you don’t have and regularly use credit, the scoring formula will have a tough time assessing your creditworthiness. That’s how folks who’ve paid for everything with cash wind up with low scores or no scores.
It’s also how people who don’t carry balances can score lower than they deserve. If they use up most of their available credit each month, that can ding their scores even if they pay their bills in full. Savvy credit users continue to pay their balances, but make sure they use only a fraction of their available credit at any given time: 30% is good, under 10% is better.
Score creators — and lenders — don’t particularly care that the credit scoring system isn’t fair to the unwitting or the credit-averse. What they care about is that the formula works in general to help separate the good risks from the bad. If you get unfairly lumped in as a bad risk because you don’t use credit “right,” it’s no skin off their noses, but it could ultimately cost you a bundle.
Myth No. 3: Great credit scores make great finances
Look again at that list of what isn’t included in your score. Some of the most important gauges of your financial well-being are missing from the credit-scoring algorithm.
That’s because credit scores were never designed to be an indicator of your overall financial well-being. They do not measure your worth, monetary or otherwise.
You can take pride in a good score, of course, but you shouldn’t assume it means your finances are sound. In fact, some of the things people do to boost their scores can come back to bite them.
One of the quickest ways to increase your score, for instance, is to pay down credit card bills. Some people do this by taking out 401k loans to pay off debts. The debts effectively disappear from their credit reports, because 401k loans aren’t reported to the credit bureaus, and as a result borrowers may see a substantial increase in their scores.
But if these borrowers later lose their jobs, they could be in a world of hurt. In most cases, the loans become due shortly after employment ends, and any unpaid balances become inadvertent withdrawals, triggering big tax bills. The money can’t ever be put back into the 401k, so these borrowers lose out on future tax-deferred returns as well.
Other people use their great scores to pile on cheap debt. People with excellent scores still get 0% balance-transfer offers on credit cards, low rates on auto loans and below-prime rates on home equity lines of credit.
But at some point, that debt load can topple them. Even a small setback — a higher interest rate, a cut in hours at work, a lowered credit limit — can be a crisis when you’ve borrowed too much. People who resisted the urge to load up on debt are likely to do better in this recession than those who didn’t. As with everything else in the personal finance world, you have to look at the big picture — and your credit score is just one of the factors you need to manage.
Are Your Credit Scores Hurting You?
Jordan Crouter
cell: 949-310-6998
www.jordancrouter.com
About the Author
I am on a personal MISSION to empower all of you frustrated stuck entrepreneurs & give you the strength, courage & support to finally turn all of your dreams into reality!
Categories: Credit Score Articles Tags: Credit, Hurting, Scores
Financing A Home: Improving Your Credit Score
Article by Gary McArdle
Today there are many homes for sale with low prices and low interest rates. Housing is more affordable now than it has been in many years. Considering the current market, why isn’t everyone snapping up homes? The truth is, many first time home buyers are jumping into the market and getting in on this affordable housing opportunity. Real estate investors are also very active as they see this unique opportunity to build their wealth. The unfortunate reality for everyone right now is that even though homes are more affordable now than in many years, lenders are very picky about who gets a loan and who does not. And your credit score is one of the primary indicators of whether or not you will get approved for a loan and what your interest rate will be.
Just a few years ago a borrower with a credit score as low as 500 could buy a home. Today that score needs to be a minimum of 620 to 640. And to qualify for the best interest rates you better have a credit score in the 700’s. No matter what your credit score is, you should know it. If it is not close to 750 you should resolve to get there and here are some easy tips to help improve your credit score.
Let’s take a look at what information on our credit report determines your score, then we will give suggestions on how to improve in each of those areas
35% or your credit score is attributed to your payment history which not only includes actual payments to your creditors, but it includes things such as collections, judgments and tax liens. With this in mind you always want to make sure you make your car, credit card and loan payments on time. Many lenders also require verification of rental payment history, so you will want to make sure you pay your rent on time as well. By the way, a payment is considered on time if it is paid within 30 days of the due date. If you have collections, judgments or tax liens on your credit, you will have to provide proof that these were paid. If there are unpaid collections you can in many cases negotiate a settlement for less than what is owed. From a credit scoring standpoint this is almost as good as paying in full as long as it is reported as satisfied in full on the credit report.
In addition, you can make a payment arrangement for tax liens and after 12 months get those rated for your credit report which will help. Judgments are required to be paid in full at the close of a loan, and you will need to get it paid and the credit report updated in order to improve your credit score. In many cases with a history of late payments we have to say, time heals all wounds. In other words, it may just take a year or so of making your payments on time to get the credit score you need. If you have items on your credit report that are incorrect, then you can dispute those items to get them corrected with the credit bureau.
30% of your credit score is attributed to how much you owe on your credit card as a percentage of total credit limit. Let me give you an example: If you have one credit card with a ,000 limit and you owe 0 on this card, your percentage of credit usage is 75% and your available credit is 25%. The lower the usage percentage the higher your credit score will be (all other factors being equal). There are 3 ways to improve this number. You can accomplish this by paying your credit card down as soon as possible. You can request an increase in the credit card limit. And you can also open up new cards. For the last two, you will need to exercise some caution however. When you request an increase in your credit card, you should ask your credit card company if they can do this based on the merits of your payment history with them. If not they will create a credit inquiry which can lower your score just a little bit. In my opinion it would probably still be worth the credit inquiry deduction from your credit to get your credit limit increased. I believe that in most cases you would have a net gain in credit score, but there have been times when I’ve seen it drop at least in the short term. By the way, do not increase the balance on your credit card when your limit goes up or you will have just undone the improvement, but now you owe more money and still have a low credit score. Similarly, when you open up a new credit card, you end up having a couple of strikes against you which is the credit inquiry and the new credit account. More about both of these in a moment.
15% of your credit score is attributed to your length of credit history. So Let’s have another example: Let’s say you have 2 credit cards. You have had one of the credit cards for 5 years and the other card for 3 years. So on average your credit cards are 4 years old, and so your credit score will reflect this 4 year average length. Now if you open a new card, you reduce your average down to about 2.7 years from 4 years. So initially at least this can have the effect of lowering your average length of credit and reduce your credit score accordingly. That is one of the reasons that opening new credit is not a quick fix for bumping your credit score up. However lets take a look at it a year from now. In one year from opening the new credit card your average length would be at 3.6 so if this is part of a longer term strategy then it would probably be a good strategy to follow.
10% of your credit score is attributed to new credit, so once again you can see that opening a new credit account not only lowers your average length of credit, but it also counts against you on a stand alone basis as well. This is also why an inquiry affects your credit score as well. When there are inquiries, it is “assumed” by the system that you are acquiring new credit whether you are or not. For example, if you had your car at the dealership to be fixed and while you were waiting you were taking a look at a new car and ended up making an offer which the dealership knows you will be financing, they will make sure to run your credit (with your permission of course). So even though you end up not buying the new car, the credit inquiry is on your credit report and will slightly lower your credit score. By the way, all inquiries reported in a 30 day period from similar companies will be treated as one credit inquiry. So if you are going to be buying a car or shopping for a mortgage, try to get all of the inquiries put in within 30 days to lessen the effect of multiple inquiries.
The last 10% of your credit score is attributed to the types of credit used, or what we call credit mix. It is good to have both credit cards, car loans, mortgages and installment loans on your credit report. For most people it will take time to accomplish all of these, but beware that someone who always uses high interest rate, high risk lenders will have lower credit scores as well. I cannot mention them by name of course, but it is the lenders who would be considered a finance company, and makes high interest rate and unsecured loans for household goods that will decrease your credit score. Now it is not bad to have an account with this type of company. Many of them work with stores to offer no interest, no payments for 90 days or longer. As long as you are not using them with regularity. Once established you should be able to qualify for reasonable rate credit cards or even an installment loan at a bank or credit union with a competitive rate as well. So bear in mind as you build your credit and credit score that these factors all contribute to your overall score.
A couple of other thoughts for you. Many folks ask me what this or that will do to your credit score and unfortunately no one can tell you exactly as credit scoring is somewhat like Kentucky Fried Chickens secret recipe of 11 herbs and spices. It is a closely guarded, highly sophisticated set of algorithms that combines all the above stated factors and reduces them down to a simple 3 digit number that is supposed to represent your likelihood of paying back the loan or credit card you are applying for. You may want to connect with a lender who can assist with guiding you through the process of improving your credit score. There are also a large number of companies who will, for a price, work on your credit score for you. There are no guarantees with these services and in addition, they are usually fairly expensive and many of them are just plain rip offs, so you would need to approach this avenue with a great deal of caution.
Finally, as a consumer of credit services and possibly as someone who want so purchase a home, you should make it a priority to take control of your finances and your credit score and find out what your credit score is and work hard to bring it up or maintain it.
Gary McArdle is a Branch Manager/Mortgage Consultant in Gig Harbor, WA and originates loans in Washington and Oregon. He has been involved in finance for the last 30 years and in the home loan business for the last 20 years. He can be reached by email at gmcardle@windermere.com
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Wonderful Property Loan Terms Despite Poor Credit Score Rating
Getting the Bait on Wonderful Property Loan Terms Despite Poor Credit Score Rating
Article by Credit Report Shop
Getting a house loan is just like finding recognition at the end of each and every academic year in school. Just before you’re awarded of any recognition, you should comply with the requirements for such recognition. For example, prior to you might be given an academic award, you have to 1st satisfy the needed general weighted average on each and every or all subjects. Other awards also follows particular criteria just before it could be awarded to deserving students at the end of the school year.
The very same thing also goes in securing a home loan. You can find specific requirements that you need to meet prior to you may have the ability to secure a property loan. One of which is that you need to possess an excellent credit rating.
Then again, in spite of the wide availability of property loans, you’ll find still thousands of people who failed to secure household loans merely since they possess a poor credit ratings. They are not fully aware that any delinquency in paying their outstanding loans caused the ?stain? in their credit record, thus they would be having a tough time securing a superb household loan.
In other words, possessing a poor fico score basically means you might be giving the lender reason to get more cash from you through giving you home loans with high interest payments. You would like to secure a household loan for the reason that you do not have enough money to finance the purchase of your new home, and yet you’ll be given a monetary burden if you ever insist on obtaining a home loan in spite of of your bad fico scores. That could be a terrible situation for your component.
Fortunately, one can find still loan options for you regardless of your possession of a bad credit rating. There are commercial lenders who supply bad credit household loan for individuals who are having a difficult time securing a loan to finance the buy of their new residence. Then again, bear in mind that because of your bad credit standing, you are going to automatically grow to be a ?great risk? to the lender. Therefore, expect that they will charge you greater interest rate as an assurance that you are going to be able to repay your property loans inside the agreed time period.
Poor credit scores will genuinely put you in a scenario wherein it really is you who’s on the bottom of the wheel. Thus, you need to strongly convince your preferred lender that you are still worthy of a different chance and not be a risk to them. How you can do it? Have a look on the following guidelines and be sure that you may follow them.
Research for the most effective accessible poor credit home loan offer inside the market. You might prefer visiting diverse commercial lenders and financial institutions inside your nearby region to know their terms and conditions also as their rate of interest for residence loans with bad credit score. In addition, an individual contact inside these monetary institutions could possibly be of terrific support inside your credit challenge.
Cleanse your credit rating whilst there is certainly still time for you to do so. If you’ll find incorrect entries posted inside your account, it really is perfect that you call the attention of the authority with regards to this matter and have them clear your record of any incorrect rating. You might also ask for some certification from your prior lenders clearing you of any monetary obligations. In this way, the recovery of your credit rating is going to be in location just before you can secure an additional loan.
Acquiring a household loan with poor credit score could genuinely be a daunting task. But if you ever manage to clear your rating inside the shortest time achievable, you are going to be able to secure a house loan that will not be a monetary burden to your component later on.
Just take the time to understand extra regarding true credit report to safeguard your financial future. Here can be a linked subject matter concerning san diego wealth manager that might be of interest to you.
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Free Credit Report Scores Online – Checking Your Credit Scores Online Is Easy!
Article by Check My Credit Report For Free
Many people understand the value of regularly monitoring their credit report scores. Identity theft affects millions annually. Furthermore, credit report score errors can result in credit card or loan denials. Sadly, many people do not take the necessary precautions to safeguard their credit. There are many ways to protect our credit. To begin, you should make a habit of checking your report every six months.
Why Check Your Credit Report Score Online?
Checking your free credit report score online is the first step to protecting your credit rating. It does not take long for someone to steal your identity. Within a few weeks, a thief may have attained several credit card or credit accounts in your name; and these accounts will appear on your credit report score.
The Purpose of Personal Credit Report Scores
A person’s credit worthiness is judged by information included in their credit report score. When applying for any type of credit, lenders will review your credit score or full credit report. The credit scores are often reviewed by retailers and lenders that offer instant credit. However, if you are hoping to obtain a major credit card, auto loan, major purchase, or mortgage, the credit lender will request a detail copy of your credit report & scores.
What Is A Credit Report Score Used For?
Credit report scores include information such as number of credit accounts, balances, past due accounts, judgments, collection accounts, etc. Based on the information, a lender will determine whether you qualify for a loan. People with several negative scores, or credit report score errors, have a lower chance of getting approved and a higher chance of larger interest rate payment terms if accepted..
When Should I Check My Credit Report Scores?
However, creditors make mistakes. An example, a creditor may have failed to report a past due balance that was paid in full. By checking your credit report score every six months, you will be able to detect suspicious activity and resolve inaccuracies. For double credit protection, subscribe to a credit monitoring service. For a low monthly fee, these services notify subscribers whenever new credit accounts are opened in their name.
It’s Easy To Review Your Online Credit Report Score
Checking your credit report score online is free and convenient. Various credit reporting companies offer free credit report scores online. Simply verify information such as your name, address, social security number, and within minutes you are able to gain access to your report. Reports are easy to read and viewable for a month.
Go to Check My Credit Report For Free.com for more information
Check Free Credit Scores at Check My Credit Report For Free.com
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