Your Credit Score
Usually, when you’re applying for a loan or if you want to get a financial assistance, one of the factors that lending companies or banks would be looking at is your credit score. It may seem to be a jargon or a highly complex term, but this one is a very simple term if you really want to get a new loan. It’s not very difficult to grasp the idea behind the credit score most especially if you are eager to acquire another loan in addition to the loans that you have or if you badly need financial support from the government.
The rationale behind the credit score is that it is used to gauge whether you are eligible for further financial assistance based on the status of your credit. To put it in the simplest words, it could be used to determine if you have bad credits, and if it happens that they found out that your credit is bad, then there is a big possibility that your application for a new loan or for a financial support will never be approved until your credit status becomes red.
The use of the credit score quantifies the idea behind a bad credit. Usually in most countries that make use of credit scores, they follow the criteria when it comes to measuring this score in which 35% comes from the credit history that tells the loans and the payments done by the debtor. It is important that the debtor pays his/her bills on time so that he/she can have a higher score. Aside form this, it is also important that the loans made by the debtor is still far from his credit limit for this one also have a bearing on the score that could be given by the credit report agencies. Using a certain standard of scoring, if you got a score beyond 800, then that means that you can get a loan right away, but if your score is below 600 then there is no way that you can get a new loan or a financial assistance even if you have other requirements with you.
If you want to have a high credit score, you just have to make sure that you were able to manage perfectly your loans in the past years so that it won’t register any problem with your credit report to audit this score.
Are you looking for more information regarding score? Visit www.nationalcreditfederation.com today!
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The Bottom Line on 31 Credit Myths (Insider Secrets to Maximize Your Credit Score for Homeowners)
The Bottom Line on 31 Credit Myths (Insider Secrets to Maximize Your Credit Score for Homeowners)
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How to Get a Credit Card If Your Credit Score is Under 500
For most people, it is impossible to get a credit card nowadays if you have bad credit. Credit card companies have their ways on checking on their applicant’s financial status and records. If the credit card finds out that the applicant has a credit score under 500, then the company will be reluctant in granting the applicant a credit card.
However, there are still credit card companies that are willing to approve credit cards for bad credit. The deal in this case is that the interest rates are higher than the normal rates of credit cards. It is better to at least improve your credit scores in order to receive approvals for credit cards with better interest rates.
In order for you to get a “bad credit” credit Card, you will need the help of smaller charge cards, which will help you rebuild your reputation and your payment history. These small charge cards will improve your credibility ratings so that the big credit card companies will entrust you with solid credit offers even though your credit score is under 500. Here are some steps that you can take to succeed in getting a credit card even with a credit score under 500.
Instructions
1. Apply for a department store credit card. Department store charge card is a card that you can only use at a particular department store. Spending will be limited but at least, it is a good recovery for your reputation once you are approved despite and demonstrate a good payment history. Approval with this type of credit card is easier than immediately to get because the requirements are much less than those big company credit cards. Most department stores offer department store credit cards.
2. Apply for a gas station card. Many gas stations offer this kind of credit card. Same as with the department store credit card, you can only use this credit card for purchasing gas. This gas credit card can help you rebuild your credit so that you can apply for other types of credit.
3. Once you have at least one of these small credit cards, you should then make sure that you pay the credit card bills on time. This will rebuild reputation and trust ratings. You can use these types of credit cards for a year or until your credit payment status has improved.
4. Check your credit report every six months to see if your credit scores improved. Being able to pay the small credit card bills will help improve your financial status. This will make you eligible to apply for the big credit cards.
5. Apply for an unsecured credit card. People with bad credit can usually apply for unsecured credit cards with credit limit from 0 to 00. The best sources are from online websites. However, these have higher rates on application and interest. Companies like First Premier, Orchard Bank and Credit One Bank usually cater to people with bad credit who are looking to get a credit card in order to improve their credit history. Companies like First Premier, Orchard Bank and Credit One Bank usually cater to people with bad credit who are looking to get a credit card in order to improve their credit history.
Categories: Credit Score Articles Tags: Credit, CreditCard, How, Score, Under
How does the credit score point system actually work?
Question by tak3032: How does the credit score point system actually work?
I want to know how do they determine the credit score point system. I know what is credit and how it works. But I want to know the numbers part like if someone runs your credit report it takes off 2points from your score, another is what if your late on your payment how much does it take off then and if I have a loan for a certain amount does that mean I get a big score or a low score? I have some old accounts (5yrs old) that need to be paid off but if I do pay them off will it really make a difference on my score? Next thing you know I pay them off and then my score only goes up by 4 or 5 points or will I even get a point. What would be the purpose then? At the same time if creditors do look at my report yes it would show paid off but the history would still show that I was delinquent for 5yrs. Whose gonna want to give me a loan any ways? Basically what is the point system and how is it calculated? Let me know so I can start to repair my credit. Much thanks and I appreciate it!!!
Best answer:
Answer by Still reading
You will get a lot of answers about how to work on your credit score. The system is proprietary and held very closely by the company which owns the system–Fair Isaac. Many people with experience with a lot of borrowers have seen specific actions affect individual credit scores. And, they can give you recommendations. But, honestly, the only way to “fix your credit score” permanently is to pay off the bills you owe. Your score may not be immediately impacted, but this action will reflect your earnest attempt to deal fairly with those who have lent you money in good faith. There are no instant fixes, but you have a better story to tell if you can say that you had loans delinquent for 5 years, but when as soon as you were able, you began to pay them off and are now handling your credit responsibly. You’re right in the supposition that no matter how many delinquent accounts you pay off, you won’t see a quick improvement in your score. But, you might find individual lenders willing to take a chance on you. And, once you get some new credit (after paying the old bills) and handle the new credit well, you’ll build your score slowly and steadily back to where you need it to be. It took years to earn a low score; it will take considerable time to prove that you’re a worthy borrower.
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You Can Get A Good Credit Score With Bank Secured Credit Card
Bank secured credit cards are ideal for those who have no credit history or for those who have bad credit scores. Since banking or financial institutions will not grant you any loan facility or credit cards if you have no credit history to check against. Since credit history and credit score are important, your initial course would be through bank secured credit cards.
Bank secured credit cards are also extended to individuals who would like to repair their credit scores by keeping their credit reports active with new rounds of credit transactions and manifest their rehabilitated paying habits. A person may have gone through a trying experience that affected his or her capacity to pay. A major illness perhaps, a divorce or sudden loss of job are situations beyond his control which caused him or her credit score to drop from good to bad.
In some cases however, a person was simply too reckless with his spending habits until every credit purchase caught up with him. A declaration of bankruptcy was his only way out. However, these persons are not doomed for life since some banks will still take the risks of extending credit facilities through bank secured credit cards. In fact, they have very minimal risk exposure via this type of credit card since the individual will be required to put up a bank deposit account. The bank deposit account should maintain a balance, usually 0, which will be equivalent to the cardholder’s maximum credit limit. Depending on the cardholder’s history, the credit limit may be equivalent to 100% of his deposit or can even be less.
The only objective of the bank secured credit cards is to provide a credit facility that the cardholder can use to create a new credit history that will eventually overwrite the bad credit score attached to his report. It may take 5 to 7 seven years before the bad credit score can be removed in a person’s credit reputation. For those who resorted to bankruptcy declaration, it will take about 10 years from the date bankruptcy was declared before the bad credit score can be removed.
The cardholder will be prevented from incurring additional bad credit points in bank secured credit cards. The maintaining deposit will be applied in case the cardholder fails to add additional funds in his account as payment for his current credit obligation. There is a price to pay though, because the cardholder will be hit with considerable amounts of bank charges. Naturally, he will be required to replenish the maintaining balance of his security deposit in order to continue with the use of his bank secured credit card.
There are banks however who will reward a cardholder for good credit records by increasing the amount of his bank secured credit card limit, although with an equivalent increase in his bank deposit balance. What is important however is for the bank to report your good credit performance to the credit monitoring bureaus. Otherwise, all the additional costs on your bank secured credit card purchases as well as the fees and charges you have paid for will all go to waste. Your bad credit score will not change unless these reports reach FICO through the credit monitoring bureaus.
FICO or First Isaacs and Co. is responsible for tabulating all the points created by your bank secured credit card history and the company can only use the information supplied by any of the three bureaus namely Experian, TransUnion and Equifax.
Be wary of banks or credit unions that will charge you with unnecessary fees just to have a bank secured credit card. Checkout Bankrate.com for a comprehensive list of credit card companies or credit unions that issue bank secured credit cards for reasonable interest rates.
For more useful information, please visit our website: THE KNOWLEDGE BASE, and look for the BUSINESS & FINANCE section.
Written by ja_schmidt
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Q&A: What credit score is needed to get home loan?
Question by gaikhur: What credit score is needed to get home loan?
I have 680 credit score and I also would pay at least 20% down payment for $ 150,000 worth of loan if it is approved. I have also one year history of car loan which was paid in time. Please suggest me,would l be eligible to get home loan with low interest rate? Or I have to pay more down payment? Or wait 4-5 months and more so my credit score will be atleast 720 and more ?
Best answer:
Answer by Judy
20% down payment is good, but 680 credit score could be a problem – you’d have better chances if you can get it up to 720.
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How to Keep a Perfect Credit Score
A perfect score of 850 may just be a technical perfection since it is very rare to see people with a credit score as high as this. A good perfect score usually includes the following: a mortgage that is over three years old, one or two auto loans that are more than two years old and less than five credit cards with very low balances that are over 2 years old.
Build up your personal credits
If you want to start out by buying things out of credit, you should enroll yourself first to credit card companies so they can already provide you with credit cards. You may need the help of a family member or friend to sign the papers for your first. These companies may also need proofs that you can pay your monthly bills. A good example is a letter of employment from your company.
Avoid delayed payments
Aside from not being able to pay late payment processing charges, paying on time is vital to maintain a good credit score. A single delayed payment can already have a huge impact on one’s credit score and every credit detail matters. If you have billing disputes, you can still pay on time and wait for your disputes to be resolved. Anyway, you will be receiving refunds in case your dispute gets approved.
Maintain a low credit card balance
It is always recommended to maintain a limit of 25% or below when it comes to your credit card balance. By doing so, it will show credit card companies that you are still interested in paying off your debts and is a good borrower. Some of these companies will even maintain or increase your credit limit.
Avoid too many credit lines
Instead of making you look reliable, too many credit lines will show that you don’t monitor and take care of your debts. If you have a credit card that has been inactive for a couple of months, make small purchases out of it or you can just cancel the card. Using them will reflect your capability to purchase and pay the bills on the due date.
Always pay the minimum on due dates
To avoid credit reports, always pay the minimum balance every due date. If possible, pay more than the minimum. Credit reports may lower down one’s credit score. Paying even the minimum balance will show that you are still trying to pay off your debts and is working on getting them paid.
Live within your means
If you own a number of credit cards, it does not exactly mean that you can just swipe them anytime you want and make purchases. Before swiping that cute plastic of yours, ask yourself if you can handle to pay the monthly bills. Don’t take on more debt that you can handle.
Keep revolving balances low
If you are planning to apply for significant loans in the future, reduce your balances at least 60 days in advance of your planned application date. This is because credit bureau balance updates are lagging and the credit scoring model puts major importance on the amount of your revolving balances.
Hire a consultant
If your low credit scores are consistent, it may be time for you to hire a consultant and pay him for credit repair. One’s credit is important and most credit repair services are affordable. Think of it as an investment.
Written by iwizard
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Categories: Credit Score Articles Tags: Credit, keep, Perfect, Score
Get a Good Credit Score
In my opinion having a good credit score is one of the most important things in life! Anyone can maintain a high credit score no matter how rich or how poor you may be if you learn how your credit score is made up. In this article I will tell you how your credit score is made and what you can do to make your score as high as possible.
35 %- Payment History
The most important thing you can do is PAY YOUR BILLS ON TIME! Even if you are paying the minimum it is better than paying late. Although late payments stay on your credit report for 7 years the effect of late payments on your report lessens throughout the years.
30%- Debt to Credit Ratio
This is the percent of available credit you are using on your credit cards. If you have 5000 dollars available credit and have 2500 dollars charged up your debt to credit ratio is 50% which is not too good! They say you want to keep it below 30% but I think its best to keep it 20% or below. So one of the most important things to do immediately is to pay down your credit card balances. Also do not close accounts you do not use. Keep them open so you have more available credit…but DO NOT USE THEM! CUT THEM UP!
15% Length of Credit History
Having a long credit history helps your credit score so keep old accounts open even if you are not using them.
10% Inquiries
Every time you apply for a line of credit there is an inquiry on your report. Having too many inquiries in a short amount of time is bad. So even though store credit cards seem like a good idea to open because you may get 10% off your purchase it may hurt you in the long run. Inquiries only stay on your report for 12 months so it is easy to fix if that is a negative on your credit report.
10% Mix of Credit
Having a mix of credit (credit cards, home loan, student loan, auto loan etc) is what they want to see on your credit report. It shows that you can handle different kinds of credit.
So the first step in improving your credit score is to get your free report from AnnualCreditReport.com and go over it and see where you need to improve. It is important to make sure everything on your report is correct. If you find something that you believe is false you need to dispute it immediately. Good luck!
Written by CS0621
Categories: Credit Score Articles Tags: Credit, Improving, Score
Improving Your Credit Score
Improving Your Credit Score
Improving your credit score is a lot like sticking to a diet – it takes time and discipline and you will only see results after sticking with it for a significant amount of time. Unfortunately, there are no quick fixes when it comes to credit since so much of the scoring is based on patterns defined over time. Since the collapse of the housing market due to sub-prime mortgages and the banking crisis in America, it is much more difficult to obtain credit in general, never mind if you’ve had credit problems. Correcting issues on your credit report can be time consuming, but with some work you can clear it up and become a low risk borrower once again.
Collections and delinquent payments can negatively affect your credit score significantly. Paying your bills on time, even if you only pay the minimum amounts, is a major factor in increasing your overall credit score. The longer you meet your payments on time, the more your score will improve. Use your credit cards sparingly, but not too sparingly. Even if you pay your bills in full every month, racking up big balances hurts your credit score. On the other hand having a zero balance is not desirable either. Try to remain at no more than 30% of your limit at all times.
Be aware that any collections on your account remain there for seven years, regardless of whether or not you pay them off. After seven years they can no longer negatively affect your credit score, but up until the seven year mark they are there for your potential creditors to see regardless of whether or not you have paid the debt.
Contact a legitimate credit counselor. You need to be careful since there are lots of scam artists looking to take advantage of those who are desperate to improve their credit or to get out of debt. Also look to pay debt off rather than simply moving it around. While many people think they should pay down the debt with the highest interest rate, it’s actually a smarter move to pay the debt that is closest to its limits since one of the factors considered in your score is your debt to available credit ratio.
Do not look to open several new accounts all at once. This will bring your average account age number down and negatively affect your score, particularly if you have only been managing credit for a short while. Any flurry of activity like this will hurt your overall credit score.
Having credit cards is OK, as are installment loans (i.e. furniture, appliance, etc.) and it’s considered a lower risk than someone with no credit cards provided that you are timely with your payments and manage them responsibly. Resist the urge to consolidate your credit card debt onto a lower interest card. It’s better to have a small balance on several different cards, than one big balance.
Written by DuncanO
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Categories: Credit Score Articles Tags: Credit, Improving, Score
When can I start building my credit score?
Question by Benjamin Franklin: When can I start building my credit score?
I am 16 years old and would like to know when I can start building my credit score? What will be a starting credit score? How can I build my credit score to be as high as possible? Thanks. Serious answers only please.
Best answer:
Answer by RantingLover
You can start building your credit when you’re 18 (in the USA at least). You increase your credit score by not going over your credit limits, paying on time, and not carrying a balance on revolving lines of credit (like a credit card).
Edit: You used to be able to be added to another person’s credit card and that would begin your credit history, and yes that could be done at a young age. But FICO does not take into account authorized user accounts any more, so you can’t do that any more.
Know better? Leave your own answer in the comments!
Categories: Credit Score Questions Tags: Building, Credit, Score, Start