ramitsethi asked:

www.iwillteachyoutoberich.com

Pedro

Jeremy Zongker asked:




When you apply for credit one of the first things almost all credit officers do is check your credit score. Although not all of those officers explained to us what a credit score is, we are all rated according to it and the offers we receive were all dependent on that score. This is why understanding your credit score is of utmost importance, and for future reference at least basic knowledge should be acquired. In the following paragraphs we will tackle understanding your credit score, realizing what your credit score means and analyzing what you can do to improve it.

Credit score is actually computed as an average of several elements from your credit report. This report is typically broken into five different sections and each of these sheets will represent a piece of the final score. Each category of credit report information occupies a certain percentage in the final score. To begin with, it is essential to say that the highest percentage is taken by the category made up of credit and payment history. An issuer will look at all types of payments: credit card payments, retail accounts, installment loans and so on. He or she will particularly look at the number of delayed or not paid payments, time passed since the last skipped payment, number of problematic accounts as compared to accounts in good standing.

The next thing taken into account when computing the score is the total amount owed. These amounts are looked at in their absolute value and also in proportion to the credit limit. The number of accounts with balances is also relevant. The third thing issuers analyze is credit history, or how much credit you’ve had and for how long. Understanding your credit score is essential to you and you need to know that the length of all credit lines and their activity will be monitored and will matter significantly in the final credit score. Also, remember that all scores take into consideration recent credit activity. This category includes number of credit inquiries, new opened accounts, their amount, the time since they were opened and of course reestablishment of credit history if there were any issues in the past. Last, even if many people do not regard it as important the type-element is also significant – that means that the type of credit line you have (credit card, installment, mortgage) also plays a role (about 10% of the final score) in computing your credit score. You also need to understand that your credit financial report is the basis of computing your score. Each of the above mentioned elements is specific to every one of us, and as such if for some people amount owed is the major factor for others credit history is essential, therefore it is impossible to give exact percentages as to how much an element weighs in the final credit score.

Understanding your credit score, none the less, is not the only important aspect, managing it is also important. You will be able to improve your credit score if you follow a few simple tips. First of all, try to pay all the bills in time. This is more important than any of the other factors. If it’s not possible to pay on time you can usually get away with paying the bill within a 30 day window of the due date. If you miss this date it is almost certain to end up on your credit report. Keep balances low on your credit cards and other revolving credit and try to pay off debt. Also avoid moving credit from one credit card to another. The low intro rates many companies offer for balance transfers can be very helpful, but it takes a toll on your credit score. It is also recommended that if you plan for applying for important credit soon, avoid opening too many other new accounts. When in doubt, hire a financial consultant. Most people may see this as an expensive luxury that they can’t afford, but in reality financial consultant prices are fairly reasonable. Even a single visit can help you drastically improve your credit score, and if that results in a lower interest rate on a large loan it will more than pay for itself. A consultant will also be able to explain the credit score better.

All in all, what you need to know is that credit score influences depends on your credit report and it directly influences your credit payments and amounts. The higher the score the lower the interest rate and the payment will be. Taking into account the importance of this indicator, understanding your credit score will automatically mean you have more chances to improve and make it higher and therefore benefit from better loans.

Sherry

Jo Jude asked:




How your credit score is calculated

Credit score information allows lenders to gauge a credit applicant to see if he or she is worth the risk of availing credit. After all, credit institutions are a business and need to profit from their investments in terms of lending their money resources. It is sensible business practice that they try to lend it to people who are responsible enough to pay them back later.

Lenders and credit institutions try to assess each credit application by looking at the applicant’s credit score information. Through it, these institutions will be able to determine if an applicant is worth the risk. The credit score is obtained from information based on the past credit activities of the applicant as well as other related information. All these can be found on the applicant’s credit report.

Your Credit Score

A credit score is calculated using the various information contained in the credit report. Different factors come into play when a credit score is calculated. A designed formula is used by credit reporting agencies to come up with the credit score. The formula takes into account the information from the credit report, both good and bad, to come up with the appropriate score.

In order for this score to be calculated, the credit report must have, as a minimum, one account which is at least six months old & one that has been updated for the same period. This will ensure that there is enough recent information in the credit report from which to base the calculation.

Payment History

Payment history accounts for about 35 percent of the credit score. This includes payments made on time as well as late payments. Public records can find their way into the credit report such as late or non- payments, bankruptcies, lawsuits, etc. These all may be considered when computing the credit score.

Amount of outstanding credit

The amount of credit that you have availed in the past accounts for about 30 percent of the credit score. Not only is the total amount looked upon but also the amount borrowed from different accounts. The balances on certain accounts may also affect the credit score. Maintaining a small balance for example, will have a positive effect on the credit report and may help keep your credit score up.

Credit History

The length of your credit history accounts for 15 percent of your credit score. Your oldest account and the average age of your other accounts are taken into consideration when calculating your credit score. Also considered is the length of time that has passed since you have used certain accounts.

The number of new credits availed accounts for about 10 percent of your credit score. This includes the length of time that has passed since you have opened a new account. The number of credit requests in a one year period is also considered.

The various types of credit that you have availed accounts for 10 percent of the information that goes into the calculation of the credit report. Revolving credit, such as credit card debts and personal loans or mortgages, is also taken into account.

Conclusion

The formula used by the different credit reporting agencies in calculating your credit score do vary slightly from company to company but they all follow a very similar process.

Hector

Robert S Holland asked:




Lenders check your credit when you apply for credit. If you are looking to buy furniture on credit, buy a new car, get a mortgage on a new home, your credit is reviewed. When the lender pulls your credit report it is considered an inquiry. Those inquiries count against you on your credit report.

They count against you because lenders think that you are looking around for credit and if you get all of the credit you may be a bigger risk. That risk relates into a problem for you. The credit bureaus will count that risk into their calculations on your credit score. Because it is a negative risk, it so reflects on your credit report.

Some people say that inquiries don’t hurt your score and other say they only affect your credit score a little. But they can affect your credit score and if you have a lot of inquiries, you will see a definite change in your credit score.

So try to keep your inquiries down. If you need a car, then I suggest that you apply for any automobile loans all at one time. This will give you several inquiries all at once and will appear that you are “shopping” for a car loan. When the bureaus see a group of inquiries all at one time they group them together and they do about as much damage as 1 inquiry rather than several.

The same is true for other things as well, such as a Home Mortgage. If you apply at several mortgage places and they all run your credit, it will appear that you were shopping for a Home mortgage. The damage is greatly reduced.

Just remember if you get accepted for all that credit, you will have a new problem. You will have a lot of “new credit”. This new credit will lower your score (because of the age of the account(s) and raise your available credit limit (in comparison with your income). But if you see any hard inquiries (the ones that count against you) that you did not apply for, dispute them and do the credit repair.

Andrew

Jon Arnold asked:




If your credit rating isn’t where it should be, the question you need to ask is, “How can I raise my credit score?” Buying a car and it’s insurance rate, acceptance on home loans, a decent interest rate on credits cards, and even getting a good job, or opening a bank account are all parts of having good credit. Many people feel that having good credit isn’t important, if they buy everything with cash. The problem is, sooner or later, everyone needs to depend on credit for something, and good credit can save you a ton of money if you are watching for your future well-being.

FICO provides scores used by two of the three largest credit score providers, TransUnion, and Equifax. Because of using FICO, TransUnion and Equifax are fairly uniform in their data. The other credit score provider, Experian uses the “PLUS” system. Because of the discrepancies among these companies you must constantly be checking to make sure all information is correct. Good FICO scores will rate between 723 to 850, while the “PLUS” system has a good ranking between 501 to 990.

There are many ways to chip away at below average scores.

1. Find a Good Credit Score Site.

There are many credit score sites to choose from, whether it be a one time payment or a site that will provide month to month. There are also sites that will give you a one time accounting for free when trying their service. The service they provide is to watch your credit report and notify you if there are inquiries or any changes that you should be aware of.

2. Check Your Scores and Credit Limits.

First check and see if there are any errors on your credit scores. Errors may include problems that aren’t even yours. This happens much more often than you might believe, especially when using different credit scoring providers. You may be surprised to find settled debts still on your score as well.

3. Pay Down Any Credit Cards.

Use credit cards sparingly and pay them down every month. They may be an easy and convenient way to buy, but you do pay extra for the convenience and it adds up quickly. Remember that, with a good credit score, credit card companies will offer you higher credit limits. Be wary of these as well and only take on what you know you can handle. Do not cancel any credit cards before paying them off. This counts against you on your credit as a surrendered card and will cause a bad credit score. A good rule of thumb, if you must carry a balance, is to pay more than the minimum amount each month, and keep your balance under about 30% of your credit limit.

4. Stay in Contact with Creditors.

Creditors appreciate communication. If you are having problems, let them know and try to work out a payment plan to stop a bad credit report.

Avoiding bad credit is your responsibility, not that of the credit score providers. They do and will make mistakes. Therefore, it is important to check your credit on a regular basis and make sure that if mistakes are made, they do not end up on your report which will make your rating lower than it really should be.

Charlene

Chris Yarbrough asked:




Free Credit Reports are Your Right!

You’ve seen the ads: Get your free credit report here! The hard sell seems excessive since the report is free, right? Read the fine print. The Free Credit Report companies require a credit card that will not be billed as long as you cancel this service within 30 days of registering. If you forget to cancel in time, you may be required to pay over $20 a month for a listing of all your credit obligations, past and present.

This does not mean that you shouldn’t take advantage of the opportunity to review your credit report. Register for your free credit report, print out a copy and then call the toll free number immediately to save yourself the unplanned monthly fee.

Be prepared to ignore the add-on sales efforts the website will send your way. They are likely to offer you your credit rating (a number that alerts potential lenders to their risk level of letting you borrow money) and for yet another fee, they will explain what you credit report and that number mean.

Credit report vs Credit Rating

A credit report lists all the important financial data about you. Good, and bad, it is all in there. You are guaranteed by the United States Government one (1) free credit report per year. You will not be required to input any credit card data at all.

These are 100% free, and are part of a legislative package approved by congress, and signed by President Bush.

What’s the catch? Once you use your freebie, you either have to wait an entire year, or pay for your next one. Requesting a copy of your own credit report will not effect your credit rating. It is only effected when a creditor requests it.

A credit score is a number used by creditors to determine your ability to repay loans. This number moves up or down based on your payment history. Timely payments increase your score, while late payments decrease your score. You are not guaranteed a free credit score.

Visit [http://www.dreamhouseproject.com] for more information on how to obtain your free report directly from the three reporting agencies.

Tyrone

Zach Ford asked:




When banks, lenders, and credit card companies want to measure the risk posed by potential clients, they turn to the FICO scoring system. Your FICO score allows these companies to see exactly how good of a job you have done with managing your finances, and gives them insight as to whether or not you will be able to keep up with your monthly payments. Knowing where your credit score ranks is the first step towards maintaining and improving this financial reputation, so take the time to check your score today!

Checking your FICO score for free is easier than ever, thanks to the dozens of reputable credit scoring agencies that have taken their services online. You can request, receive, and view your score and credit report all in a matter of minutes, usually under 5 minutes. Isn’t technology fantastic? Even better is the fact that the US government has mandated that all the major credit reporting bureaus must give citizens a free copy of their credit information, if requested, once per year. This means that you can not only securely and quickly receive your FICO score from the comfort of your home, you can do it totally free of charge.

Once you have received your credit score you will want to determine how good, or bad, it ranks compared to the national average. FICO credit scores range from 300 to 850. The average American FICO score in 2009 was 692 points, which is considered a B+ score. A score over 720 is considered an A, and anything over 740 is extremely good and will get you an A+ rating. Any score over 620 is considered to be good credit and should not inhibit your ability to get approved for loans, leases, credit cards, and other financial services. However, if your score is under 620, you might want to consider taking steps towards improving your finances and repairing your credit.

George

Jennifer Quilter asked:




Credit score rankings are the foundation of understanding what your rating means, which is really the foundation of all your financial endeavors. Whenever you go to apply for an apartment, a loan, and even a job, people will look at your rating. If you don’t know what your rating means, you won’t know what to expect in these circumstances, or how to make them better.

The truth is that every company decides for themselves what numbers they think are bad, acceptable, good, or excellent, so reactions will slightly vary from place to place. We can get a general range, however, and make changes from there.

Credit score rankings go from about 350 to 850, with people on either end being extremely rare. Most people will have ratings between 450 and 750.

When you are under 600 you are in a bad place. Towards the top of this you may be able to find people to work with in some instances, but for the most part you won”t be able to get loans or make other financial goals possible.

People in between 600 to 650 are still in an iffy place, but for the most part your rating is acceptable. You will be seen as a risk, however, and your interest rates on loans or insurance will be very high.

Ratings between 651 and 680 should always be acceptable, but your interest rates are still unfavorable.

A good place to be is between 681 and 720. This is a strong score and you’ll have a nice interest rates, sometimes you’ll even be offered the best rate at less competitive places.

Anything over 721 is excellent! You’ll get the best interest rates and most flexibility out of companies because they’ll want to keep you as customer.

Your rating is calculated based on information in your credit report, so if you don’t like where you fall on this range, or you want to look at keeping things clean to keep your rating up high, you’ll want to look at your report and see if there are any things you could be doing better to look better to creditors.

While this can all be very confusing, knowing all of this will help you take control of your finances and move forward. Hopefully this information has shown you where you stand, and where you’d like your credit score rankings to be.

Ellen

Chris Wight asked:




There is almost no company now who does not look at your credit score when deciding whether to approve your application for credit. When you apply for credit online, typically the only criteria is a certain credit score that must be meet in order to be approved, and many other lenders also have minimum credit scores they require to open an account. You can see how a credit score can really help speed along the process of applying for credit.

Nevertheless, what good is the score? There are several advantages, such as being approved for loans much quicker than when a lender would have to look over your entire credit file before making a decision. Another benefit is that credit decisions are often fairer and less likely to be based upon criteria that are not allowed to be considered such as gender or race.

However, while these benefits are great when credit is used properly, these same benefits also make it much easier for someone who is trying to commit identity theft to be successful. Because accounts can be opened online with a minimal of information someone with a good credit score can be the fodder of a huge identity theft spree that leaves a credit report badly blemished and the criminal enjoying the purchases for months.

This means that because of the ease in which people are able to commit identity theft it becomes very important to work diligently to protect your credit. Ensure that you guard your personal information and do not hand it over to anyone who asks immediately whether over the phone or even over the internet. Each time your information is passed around, it is at risk of being stolen. This means you should be very careful handing over your information.

It is also important to consider that if you have a good credit score, a sudden rash of identity theft can leave your credit score as much as 300 points lower. This can mean the difference in interest rates of several percentage points, which leaves you badly harmed. You should always take a very proactive approach to watching your credit to ensure that you are not making it too easy for someone to apply for credit using your easy to use credit score. Remember, while a credit score makes it easier for you to use credit, it also makes it much easier for someone else to use your credit as well.

Carla

Natalie J. Johnson asked:




Uncertain future could play its role anytime. Your positive credit worthiness could shape into worst without any prior warnings. Financial report collection is one of the worst things one can ever imagine within the surroundings of credit dealings. If you are unfortunate to come across the report collection then your credit score would start to creep towards decline. The financial institutions which used to welcome you with smiles would not entertain you in positive gesture, anymore. If you intend to apply for any loans, mortgages or credit cards, your applications would face refusals.

Collection on report could be an ongoing threat on your report that would continue to bring your credit score to worst possible levels. Stated below are several tricks & ways to overcome credit report collections to bring your credit worthiness at normal conditions again.

Check the age of your collection entry. If is more than seven years then it would be, spontaneously, removed from your report as FCR Act regulates credit bureaus to wipe out records of collections which age more than seven years.

Writing a dispute letter to credit bureaus could also be of great benefit to throw away report collection. If credit bureaus find your dispute legitimate then they would remove collection from your credit report and you would get the updated credit report without a collection entry.

In case, where you have already paid for the collection but still it appears on your report then you should immediately contact your creditor to update credit bureaus about your payments. Once credit bureaus get proofs about your payments then they would replace the collection entry with paid collection.

Taking the services of credit repair firms could also be a good step towards removal of report collection because credit repair firms carry the experience & expertise to deal with different sorts of collections. There are many success stories of people who were able to get rid of credit report collections with the help of credit repair firms.

Esther