Justin Hutto asked:


Your credit score is a three digit number that will have a huge impact on your quality of life. This number can save you money or cost you money in high interest rates and down payments.

The credit bureaus use an equation to calculate your score. They do not release this equation to the public. They are scared that people will use that information to improve their credit score.

You would assume the credit bureaus would want people to have a good credit score. However the credit bureaus customers are the lenders. It is in the lenders interest for the borrower to have damaged credit. This way they can charge higher interest rates and earn a bigger profit.

These are the five influencing factors on your score. You will also find approximately how much each factor impacts your score.

1. Payment History (40%)

This is very important. On your credit report it reflects your credit limit, credit balance, minimum payment and payments received.

If you have a credit card that is always at the limit then this will hurt your score. But if you can make big payments on this account it can help your score.

This is also where negative listings will be taken into account. You should remove any negative listing on your credit report. This can be done by either disputing the listing with the credit bureau or settling the debt.

You should first try and dispute the mark and if that is unsuccessful then make arrangements to settle the debt. However make sure to get the creator of the negative mark to remove the negative item from your report in exchange for your payment. I suggest to getting this agreement in writing.

2. Ratio of Debt to Available Credit (30%)

This means are all your credit cards at their credit limit? How much credit do you have that is not being used?

Your score can receive a bump if you can show the bureaus that you have available credit. The best method of doing this is by keeping your credit card balance around 10% of the limit. This will help because it shows the bureaus that you use your credit and that it is used responsibly.

3. Pursuit of New Credit (10%)

How often is your credit run? If it looks like you are constantly having your credit checked your score will be lowered.

On your credit report is will show the frequency of your credit being run. So you should not be constantly making purchases using your credit or be trading in your car every couple of months.

However the threshold of this varies between credit bureaus. There are a certain number of inquiries that credit bureaus expect to find on your credit report.

Just try to avoid making a lot of purchases using your credit. There are people that switch phone plans and buy cars multiple times in a year and this will hurt your score.

4. Credit Experience (10%)

Do not worry about this factor. It only shows the purchases that you have made using your credit.

Meaning is your credit used to finance a mortgage, student loans, credit cards, auto loans, and etcetera. The more diverse your purchases the better however this factor will not make or break your credit score. Thus don’t worry about this factor.

5. Length of Credit (10%)

How long have you been using your credit? Did you just get your first credit card?

This is another factor that you can not influence much and will not make or break your credit. If you are a newbie to the credit world you can still have a very high credit score.

In sum, only worry about the first two factors listed. However for your own knowledge the other three are looked at when your score is calculated.

If you take care of the first two factors then your score will be high. With a high score you can take advantage of rewards, automatic approval and save thousands with low interest rates.



Adam

Liam G asked:


Lenders like stability

This is shown in a number of ways, for example being with the same bank, employer and at the same address for a few years. Basically, the more stable your current situation is, the higher your credit score will be.

For instance, homeowners are more likely to score higher than those who rent. If your home has a landline it’s always best to put this down on applications over any mobile number, as this helps with security checks.

Also, the longer you have been with a particular employer the better, and those that are self-employed may find it harder to get approved for secured loans, even with a large income.

Get closure

Contrary to popular belief, keeping multiple disused credit accounts open is not always a good move, especially if you’re trying to boost your credit score.

All this shows prospective secured loans lenders is that you could run up a lot of potential debt, which obviously might make them reluctant to open up further more lines of credit.

It is important to note too, that simply cutting up a card doesn’t close the account, it merely prevents you from using it. Also, even after a phone call to the lender, requesting closure of the account, it will usually be left open for a short while. It is a good idea to give them a call again in a few months time to confirm the account’s closure.

Building/rebuilding your history

First-time applicants are likely to find it quite difficult to get accepted for any lower-rate credit deals. This is because of their lack of credit history.

One of the things about credit scoring is that it aims to predict what you will do with any new credit, based on your past habits.

Therefore, if you are new to the world of credit, then there is no way of predicting how you will use it. For this reason, many first-time applicants will find themselves lumbered with higher interest rates.

It’s best to continue with any high-rate card or loan offered for up to a year, making sure you spend a little – and always make repayments in full, to avoid any ludicrous interest charges.

Once you have done this and have built some (hopefully positive) history you shouldn’t have any problem applying for lower-rate secured loans.

This method can also be used to repair bad credit history.

Don’t miss any repayments

Although it’s always recommended to make more than just the minimum monthly repayment, if you are struggling to meet repayments, it’s always best to pay at least the minimum than to pay nothing.

Doing otherwise, even just the once, can seriously damage your credit rating.

If you are continually struggling to meet monthly repayments then it is usually a good idea to call the appropriate lenders. They may be able to arrange an alternative repayment schedule.



Jamie

Lucky asked:


This Website promises to give you information that will raise your credit score in a couple of hours or in 1 day. have any of you all used this?

As a Credit Repair Specialist I see many people who don’t know they can improve their credit score in 24 hours or less, but they can. Only recently with breakthroughs in modern technology has it become possible to improve your credit score in 24 hours. I’ve been able to help clients change their credit rating in as little as 24 hours and save thousands…some clients have even raised credit scores in as little as 2 hours. In the middle of one of my own real estate investment deals recently I was able to raise my credit score from 618 points to 650 points in one day! I’ve found at least 3 techniques that could help you do the same thing!

Look At How Quickly I Raised My Credit Scores:
Credit Bureaus Before
After
Notes

Experian
610 points
641 points
1 day!
Equifax
618 points
650 points
1 day!
TransUnion
585 points
626 points
1 week

Rafael

Jennifer Morva asked:


Once you got the tag of bad creditor, your image in loan market becomes sullied and you may find yourself alone when some extra cash is needed to combat with financial needs and crisis. But shrug off all the worries now, as bad credit rating loans are available for you.

Your credit rating is the information held on you that is used by credit agencies to assess your credit score. It is the information assessed to gain an estimated likelihood that you will repay any given loan; the better your credit rating, the lower the risk you present to potential lenders.

If you are a homeowner, mortgage payer or tenant with a bad credit rating and want to take out a loan, it makes sense to consult a finance broker or apply directly with a lender who specializes in loans for people with adverse credit, CCJs, defaults, arrears, discharged bankrupts and people who are self employed.

A specialist finance broker has access to the UK’s top unsecured and secured loans for people with a poor credit rating and can save you time and money by doing all the shopping around for you, ensuring you don’t miss out on the cheapest rates.

Whether you require a loan to consolidate debts, buy a car, pay for a holiday, home improvements or a wedding, help is available to get the finance you require. The loan allows you to borrow any sum between £3,000 and £100,000 over a repayment from 5 years up to 25 years. In certain circumstances, larger amount up to £250,000 can be arranged.

You can look for bad credit rating loans through online lenders as they are the cheap and hassle free source of money. What more you are saved off all the physical exertions.



Kimberly

Chane Steiner asked:


In America, you can’t even walk down the street without somebody wanting to check your credit. If you suffer from bad credit, then you need to learn techniques to improve your credit rating – and you need to learn them now! The very happiness of your life can depend on it. Let’s take a look at some of the most effective ways to do it:

Tip 1: You absolutely have to stay on top of the information game. It is your right to obtain a free credit report once every year from each of three major credit bureaus: TransUnion, Experian and Equifax. If you are really smart about it, you will get one every four months from each one by alternating. Go over these reports very carefully and look for the following:

•    Any negative item. You see, every negative item on your credit report can be disputed by you. If the agency cannot verify the negative claim within 30 to 45 days – even if it’s true – it must be stricken from your report!

•    Outdated negative items. All negative items on your credit report have a statute of limitations. After a given time period, they are supposed to drop off automatically. So, if you notice something that is 10 years old, you probably want to request that it be removed.

•    Items that have been paid in full and do not state so.

•    Any other item that catches your attention!

Tip 2: Start paying your bills on time. Regardless of your past credit history, it is never too late to start improving your credit rating. Pay on time every time and you will see positive changes begin to occur.

Tip 3: You have to keep your credit cards paid down or paid completely off to improve your credit rating. Max them at 30% of the actual maximum and then pay them in full every month. This is the second most important scoring variable (after making timely payments) that contributes to your credit score.

Tip 4: Break open your wallet and dig out some of those old credit cards. Use them and pay them promptly and in full. Long-standing credit accounts rate you higher than brand new ones. Keep that positive payment information flowing into the major credit reporting agencies to help to improve your credit rating.

There are many more tips and tricks that you can utilize to improve your credit rating quickly. These are the most powerful though. Use these and be diligent. You will begin to see dramatic improvements in your credit rating. Just stick to the plan and keep repeating it. It is very possible to improve your credit rating with a little effort and patience. Soon, you’ll be back at the top!



Miguel

KeKi asked:


When I apply for credit, I’m denied. It seems like I’m stuck between a rock and a hard place. I’m afraid to apply for a car loan because I think the interest rate will be too high. I also know that all these inquiries will further reduce my score.

Jane

Michael Redbourn asked:


perly repair your credit, and to get the very best possible results, you’ll first need to carefully learn the steps and then apply what you’ve learned in a methodical and systematic way.

Obviously it will be easier to repair a credit score that’s just a little dented, rather than one that’s in terrible shape, but the same methods have to be used in both cases.

Since credit cards are without doubt the most important things to get sorted out, you might think that it would be best to wait until your credit’s well on the way to being fixed before applying for them, but you’d be wrong. The reason that you’d be wrong to wait is that it takes around six months before you’ll see any benefits from any form of revolving credit.

If your present situation suggests that you’re unlikely to get approved for any new credit cards, then take out two secured ones, and since almost anyone can get secured credit cards, I’ll assume from this point on that you now have two of them. It’s the best number to work with and I’ll now explain how to use them to best advantage.

Start using them as soon as you get them, but never let the balance, which is the amount that you owe, go down to zero, and always keep it to less than 20% of the available amount. The difference between a maxed out credit card and one that is within the above ranges will make a difference of around 150 points to your credit rating, and that’s a huge number of points!

I should perhaps add here, that it doesn’t really matter how you use your cards if nobody is going to be checking their usage, but make sure that you follow the above advice for at least sixty days before you apply for some new form of credit.

The FICO (Fair Isaac Corporation) scoring system has a built in bias against all consumer credit that’s used for the purchase of furniture, appliances, electronics and any kind of store loan in fact. So if you have these kind of debts them then try to get rid of them, or at least cut down on their number, at least sixty days before someone is likely to run a credit-check.

You’ve most likely heard or read, that creditors will make deals and accept settlements for much less than the amount that owing to them, and you probably wonder why they’d be willing to do it. It’s because of what is known as the ’statute of limitations’, and learning about them will enable you to get a great deal of debt removed from your credit report for next to no money, and with very little effort on your part. The ’statutes of limitations’ vary from State to State and are different for different types of debt, so the details are beyond the scope of this article, but they can easily be found on the web with just a minimum of effort.

A ’statute of limitation’ is the period of time that is allowed for a debt to be collected through the courts, and it’s generally much shorter than the reporting period limit for either credit or debt, and if a creditor knows that you are aware that your debt is outside of the statute of limitations then he’ll basically be willing to take what he can get, in order to remove the debt from his balance sheet, and after he removes it, it should no longer show on your credit report.

Finally, if you’re being harassed by debt collectors then it’s possible to put a stop to them almost at once by simply sending the company a ‘cease communication letter’, and there are no negative legal ramifications to firing off this kind of letter either.

So you now have some first-rate tips as to how to improve your credit score, and you also know how to stop debt collectors from knocking at your door, so if you start acting today then you’ll start seeing the results tomorrow.

Paul

Saheed Y asked:


Okay If it helps any I’ve been opening and closing accounts (which I won’t do anymore) with credit cards since 2006. I am now 21 years old with only 2 active credit cards and a credit score of 691 rated at fair? I’m not stupid with my money or credit but I still would like some suggestions as to how I can improve is so I get the best deals on my first loan. Thanks for any input!

John

Abhishek Agarwal asked:


Everyday life seems very easy when your wallet is full of credit cards. But at the end of the month when the bills for the same start pouring in, you realise how difficult it is to juggle credits. You do not know which ones to pay off, which ones to carry forward, all in all, you are in a financial soup. Slowly but surely, your credit rating takes a plummeting and you will find it extremely difficult to get a mortgate for your home, or get a loan for life’s many milestones like your child’s education, that coveted new car, or any durables that you long for. Or it could be that your spouse or child may have indulged in shopping sprees you could not afford. Or perhaps there was a medical emergency in the family. So for no fault of your own, you find yourself in a financial mess.

What should be done now? Well, shove off the troublesome burden of sorting things out to the experts – in this case – certified credit counselors who are used to handling all sorts of financial complications. They will thoroughly study your particular situation and chalk out a program of removing your debt burden for you with all the personal attention you deserve. They will also explain to you the basics on which credit cards operate so that you can resist the temptations to use them day in and day out.

Since they are well aware of rules and regulations of creditors, they are in a position to advice you on how to manage repayments to your best advantage. They will also negotiate on your behalf with companies to whom you owe money to reduce the delinquent fees or late payment charges. A step-by-step repayment program is drawn up for you and you are also advised on how to keep your outstandings to a minimum. A financial discipline is compulsorily instilled in you. Thereafter, if you keep your commitment to the program, you will find that within a few months, all your debt has been paid off and your credit rating has improved miraculously.

Of course you must not think that the debt consolidation advice will be freely given. They will of course deduct their fees alongwith your monthly deductions towards debt repayment. If you give them a lumpsum every month, they will take care to distribute it to the various creditors with an optimum spread. The term non-profit means that after taking care of all overheads, the company’s accounts do now show profits. They will also educate you as to how well the credit card wheels are oiled and what you can do to prevent them running over you.

However, you need to be cautious which company you trust for the all important job. You should not land from the frying pan into the fire. It takes all kinds to make the world. Get references, cross-check credentials and do your utmost to verify the company’s trustworthiness. You could also get a few quotes from such companies, before you zero in on one. Then although you do not like the idea of incurring anl additional expenditure towards their services in your debt-ridden state, when they take you to a credit free state, you will find that it was worth every penny and more. The certified counselors will also guide you as to how your finances should be handled. That will help you consciously to stay creditworthy.



Jay

Abhishek Agarwal asked:


It was I the 1950′ that a man called Fair Isaac decided to come up with a system to determine which individuals were worthy of credit and which ones were not. He called his system a credit rating and this has become a standard practice in the United States known as FICO. The credit rating was assigned to individuals based on their record of repayment of loans and debt to all kinds. This little 3 digit number can be the cause of you getting approved for a loan or being disapproved.

From that time on everything anyone des in the US with respect to the use of any kind of financial instrument, including credit cards, even loans and mortgages, reflects in your credit history and this is a snap shot of your credit worthiness. The Fair Isaac Company receives this data every month from creditors and compiles this information after which a complicated mathematical formula is applied, which demonstrates your credit worthiness. Though this information is not meant for public viewing it is available to any financial institution you may seek any financial aid from.

With the average rating of a US citizen being 720, it is common knowledge that the higher the number goes the better is your credit rating, or you worthiness of a loan. On the other hand if your credit ratings falls below the 650 mark the more likely you are of being denied a loan. Unfortunately this number also hiders your ability to get rental accommodation. People with credit scores lesser than 600 are very high credit risks and are almost certain to be denied any form of financial assistance from any institution.

It is, however, not a rule of thumb that you will definitely get disapproved due to your credit rating. Creditors are well aware that your ratings can go wrong due to a number of factors. Medical bills could be one of the reasons that you could not keep to your repayment schedule. Accidents which required much needed automobile repairs are another reason for you to skip payments. There is an endless list of reasons that are not in your control and so your credit ratings go wrong. The IFCO does not take these into account, but some credit companies do when considering your loan application.

Nevertheless it is important to stick to a repayment regime in order to maintain a good credit score. Bad credit history will only hamper your efforts in securing a much needed loan in times of emergencies. So, maintain good credit records with all three debt bureaus. And if your credit history is not too good it is time you started working on improving it.



Sandra