Credit
Your individual credit rating is one of your most important personal possessions.
It's the most important factor for new financing and the interest rates you receive.
It can mean thousands per year in additional interest on a home, auto and credit cards.
I'll help you build and establish or restore your credit profile with FREE insider tips.
Before a major purchase or any attempts to repair your credit know how credit works.
I've helped hundreds of clients by recommending the right solution for their situation.
Understanding Credit Reports
The three credit bureaus are: Equifax, Experian and Trans Union.
They complie information about your credit history and sell it to potential creditors.
The most important information they use is your payment history - good and bad.
Each bureau uses a unique credit scoring model to create a score from 400-900:
400-579 Poor
580-619 Fair
620-679 Average
680-719 Good
720+ Excellent
Scores may differ substantially - because the bureaus do not share information.
"Tri-Merge" reports combine the information and scores from all 3 bureaus.
Most creditors will use the middle score of the 3 scores to make a decision.
Example: If the scores are 592, 635 and 651 - the score used to qualify is 635.
The higher the credit score the better...find out what impacts scores the most.
What makes a Credit Score
35% - How you pay your obligations.
On-time, late 30/60/90-Days, collection, Bankruptcy.
30% - Oustanding Debt/Credit Limits
Balances over 50% of the limit will lower the score.
15% - Length of Credit History
Measures credit depth - the longer the better.
10% - Type/Mix of Credit
Intallment (Home/Auto), Revolving (HELOC/Credit Cards).
10% - New Credit Applications
Number of new applications within recent months.
There are several other factors that affect a credit score.
What Impacts a Credit Score
Good credit appears on reports forever while negative credit remains for 7 years.
Public Records such as Bankruptcy, Judgments and Liens will report for 10 years.
Recent activity impacts scores the most - lates, collections opening/closing accounts.
The effect of negative activity fades over time - especially if it's over 2 years ago.
Common Credit Repair Pitfalls
- Paying off old collections or closing accounts will actually lower a credit score!
- Opening new accounts or excessive credit inquiries can reduce a credit score.
- Consumer Credit Counseling has a very negative effect on credit scores.
It's actually viewed as a Chapter 13 bankruptcy by future creditors.
- Debt Settlement programs also impact scores negatively
Ask me for tips to avoid these and other pitfalls and help reach your goals.
Information on the Report
Each bureau shows the same type of information in different formats: Identification - Includes name, address, Social Security Number, and date of birth.
May show name variations - such as a/k/a's or maiden names for married women.
The information is from credit applications and the info you provide the bureaus.
Accounts - Mortgages, auto loans, credit cards, installment loans (furniture), etc.
Shows account type, date opened, last activity date, and payment history.
Most important information is the payment history and balance-to-limit ratios.
Public Records - Bankruptcies, judgments, tax liens, past due child support, etc.
Inquiries - Notations whenever creditors order a copy of your credit report.
(New applications, reviews by existing creditors and "pre-approved" promotional offers)
Additional Information - Includes your previous addresses and/or employers.
Warnings - These are possibe indicators of suspicious activity.
(Multiple Social Security Numbers or an address previously associated with fraud)
I'll help establish or restore your credit profile with FREE insider tips.
FREE Credit Analysis
A personal credit recommendation based on your specific circumstances. Get your own Free credit report : AnnualCreditReport
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