Posts Tagged ‘credit rating’

A Couple Facts With Regards To Consumer FICO Scores

While lenders ultimately consider several factors from your credit report when evaluating you as a borrower, the first thing they see is your FICO scores. In fact, many lenders rely on credit ratings to pre-screen borrowers for credit offers, so if you’ve got low FICO scores, a lender may never even look at your credit report. If you want to get the best credit offers, you need to understand your FICO score. If you’re thinking of buying a car or a new home, you need to know what your credit says to lenders. Are you a good risk? Can you get a decent APR?

What are FICO ratings, and why are they so important?

credit scores are a method of determining creditworthiness created by Fair Isaac and Company; hence the name FICO ratings. credit scores take the information in your credit report and boil it down to a number, somewhere between 300 and 850, depending on your credit history. FICO scores are reported by three major reporting bureaus; TransUnion, Experian and Equifax. It’s possible to have three different credit scores with the three different reporting agencies.

Lenders use your FICO ratings to determine how likely you are to repay your credit. Some lenders don’t even offer credit to borrowers with low credit scores, using the data to pre-screen potential borrowers. If you do have low credit ratings, chances are good that you’ll get a higher APR or smaller loan amount or credit limit, or be ineligible for credit.

It’s all a numbers game; how credit ratings are determined.

Your credit history is evaluated and assigned a rating, based on a model similar to your credit history. While Fair Isaac and Company declines to release information about these models, financial industry insiders report that there are literally thousands of potential models for your FICO ratings. By changing your credit history, such as disputing an inaccurate item or closing a long-standing account, you can potentially change the model under which your credit score falls. Sometimes this increases the FICO ratings, but it can actually lower the credit ratings if your new model is less favorable, or if you perform differently under the new model compared to other people within the model.

Getting your FICO rating.

If you’re thinking about taking out an auto loan or buying a home, you should start by getting your FICO scores. While some states are entitled to a free copy of their credit report once a year, these free reports do not include credit scores. You can purchase a report containing your FICO ratings directly from the reporting bureaus, or you can sign up for a credit monitoring service that includes access to your credit scores. With the increasing threat of identity theft, many banks are now offering privacy protection services, which you can use to monitor your credit report on an ongoing basis and ensure no fraudulent activity occurs. Many of these services bundle FICO scores into monthly or quarterly reports.

This article is brought to you by www.JemCreditCards.com – More than charge card accounts, we build financial stability. A great place to compare the best credit card offers including Discover balance transfer credit cards, Chase credit cards, and much much more!

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A Bunch Of Good Ways You Can Improve Credit Scores

Credit ratings are the backbone of the lending market, and many lenders use FICO scores to pre-screen borrowers for the best deals and interest rates. If your credit score isn’t high enough, you could be paying hundreds or thousands of dollars in high annual percentage rates; cash better off in your pocket. If you want to hang onto your cash and qualify for the best deals, you need to discover how to improve your credit scores.

When do I need to raise my FICO scores?

The best FICO scores are ratings above 720 on a scale that goes up to 850. FICO ratings above 720 are considered excellent, and help qualify you for the best rates lenders can offer. Scores in the 600-720 range are considered fair; you can probably qualify for a loan, but at a higher rate than an excellent credit rating. FICO scores below 600 are considered weak, while ratings below 500 are categorized as very weak. With credit ratings between 500 and 600, you may have trouble getting a loan. If your FICO scores are below 500, you’ll have a hard time getting credit and need to work on raising your FICO ratings.

How payment history affects FICO scores.

Your payment history is one of the most important aspects of your FICO score. Late pays and defaults make a large negative impact on your credit scores, while a bankruptcy can absolutely tank your credit. If you’ve got blemishes on your payment history, try to clean them up. If you’ve defaulted on an account, talk to the lender about paying the account and having them report it as paid. Dispute erroneous account history data, as it can severely impact your credit scores.

Credit ratio is a key component of FICO ratings.

Even if you’ve never made a late payment, you could still find yourself with low credit ratings. Your credit ratio plays a large part in your FICO score. Lenders look at your total credit available, and how much you’re currently using. An ideal credit ratio is 30% or below, while a credit ratio of over 50% can actually lower your FICO score. To improve your FICO ratings, pay down your charge card balances or talk to your lenders about increasing your available credit. Anything you can do to improve that credit ratio is going to improve your FICO ratings.

Leave old credit accounts open, and avoid opening new ones.

Length of credit history is another important factor in your credit scores. If you want to stop using an account you’ve had for ten years, stop using it, but don’t close it; otherwise your longest account could be years shorter. Conversely, avoid opening new credit accounts unless you absolutely need them, because applying for credit lowers your FICO score. If you’re shopping for a home or auto loan, make all of your inquiries within 30 days so that they count as one inquiry; otherwise, you’ll have multiple negative entries as you pull credit to look for a loan.

This article is brought to you by www.JemCreditCards.com – More than credit card accounts, we build financial stability. A great place to compare the best credit card offers including Discover balance transfer credit cards, Chase balance transfer cards, and much much more!

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A Few Great Ways People Can Improve Credit Ratings

Discover ways to improve your credit score without the help of a consumer credit agency.

Dealing With Bad Credit

If you’re saddled with a bad credit rating and tired of having it affect your life, it’s time to take action. To get moving on your credit repair, you’ll first want to request a copy of your credit report from each of the three credit bureaus, Experian, TransUnion and Equifax.

Once you have those reports in hand, look over them to see what is negatively impacting your score. Expect to see two different kind of negatives: those you are responsible for and those that are errors. To repair your credit, you’ll need to put in the work to correct both types of negatives.

Correcting Credit Report Errors

If you find errors on your credit report, you’ll need to dispute them. To do so, simply send a letter or fill out a report with the bureau reporting the error. This report should detail the specific mistake you are disputing and include any proof that you have to support your claim-proof of on time payment for a bill that is reported as a late payment, or proof of payment to an account that is reported as never paid.

Once the credit bureau receives your claim, they’ll have 30 days to investigate your dispute. If they can’t prove that the information is accurate within that time, it will be removed from your report.

Fixing Your Credit Missteps

If you find negatives on your credit report that you know you are responsible for-late payments, non-payments, etc.-you won’t be able to wipe those mistakes away as easily as the reporting errors. To get rid of these types of negatives, you’re going to have to work to prove your creditworthiness.

Here are several ways to turn your credit rating around:

Make all of your payments on time.

Pay off any accounts in collections.

Get current on all of your delinquent accounts.

If you can’t afford to pay all of your bills, call your creditors to negotiate lower payments, a new payment date, or a lower APR-whatever it’s going to take to get you caught up. One phone call could prevent your accounts from being reported as delinquent.

Pay down your balances. If you are at or close to the limit on any of your credit card accounts, this is hurting your rating.

Slowly close out accounts as you pay down your debt. Store cards often have a negative effect on your credit, so those should be the first to go.

Credit Repair Mistakes to Avoid

As you work to boost your credit score, be sure to avoid these credit repair don’ts:

Don’t close out accounts until they have been paid in full.

Don’t close out too many accounts. You should aim to keep your used credit at 50% or less of your total credit limit.

Don’t close out your oldest charge card accounts. These help your credit history by proving longevity.

Credit repair takes time, but it isn’t hard to do. Take a look at your credit reports and form a plan to get your credit back on track.

This article is brought to you by www.JemCreditCards.com – More than charge cards, we build financial stability. A great place to compare the best credit card offers including Discover credit cards, Chase credit cards, and much much more!

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How Will Credit Counseling Harm Consumer Credit Scores

Many Americans ask “Can credit counseling hurt my credit?” if they are in financial trouble and see an advertisement for services that claim to help consumers in debt. Unfortunately, the truth about credit counseling and its impact on your finances isn’t easy to pin down. Much of it depends on the type of credit counseling you choose.

Can credit counseling hurt my credit?

The counseling aspect of credit counseling cannot hurt your credit. If you go to a reputable credit counseling agency, you can meet with a counselor who can evaluate your financial situation and help you figure out your options. You may receive budget counseling, savings counseling, or information about useful programs. However, that is where the counseling aspect of credit counseling ends. Anything beyond a simple discussion can affect your credit.

Can other aspects of credit counseling hurt my credit?

Unfortunately, yes. Anything beyond discussing your financial scenario can have a negative impact on your credit report. Some so-called credit counseling companies don’t offer counseling at all, but instead offer to negotiate debts on your behalf or put you on a debt management plan. When you run into these programs, you need to be extremely wary about how you proceed. Each of these types of programs can negatively impact your credit report.

How does the debt negotiation aspect of credit counseling hurt my credit?

When you sign up for debt negotiation, you agree to turn your credit accounts over to a third party, who attempts to lower your debt by making deals with a creditor. However, creditors are typically unwilling to cut deals until your finances are behind; in most cases, you must be in substantial default before you can negotiate with creditors. You should only consider debt negotiation plans if you’re seriously behind on your payments.

If you sign up for a debt negotiation plan, but you’re not behind on your debt, some of these companies hold your monthly payments so that you fall behind. This gives them the leverage they need to negotiate with creditors and lower your debt. Your credit report reflects the lack of payment as late pays or default, and your credit score may drop drastically. These companies may call themselves credit counseling agencies, but do not offer any actual counseling; they simply charge you fees to mess up your credit report.

How can debt management programs associated with credit counseling hurt my credit?

Some genuine credit counseling agencies offer debt management programs as a way to address your financial problems. With debt management programs, you pay a lump sum every month, and the program distributes payments to your creditors. In some cases, these payments may be less than your minimum monthly payment. This can cause negative entries on your credit report, as well as increasing your debt due to late fees or underpayment fees. Plus, the creditor may report late payments to the credit bureaus, and a note will appear saying that you are working with a credit counselor. However, your credit score won’t drop just because you are getting credit counseling, and it may help you in the long run if a record of regular payments appears on your credit report.

This article is brought to you by www.JemCreditCards.com – More than credit cards, we build financial stability. A great place to compare the best charge card offers including Discover credit cards, Chase balance transfer credit cards, and much much more!

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Who Might Look Up Your FICO Scores

If you’ve ever wondered, “Who looks at my credit rating?” we can tell you who does and how it might be affecting you.

Credit ratings are far from secret

Think your credit score is private information that only a few are privy to? That may have been the case in the past, but not anymore. Nowadays more and more Americans want a peek at your credit, and we’re not just talking about creditors, either. Here’s a list of some of the Americans who may be taking a look into your credit history:

Insurance Companies. The insurance industry has found that it can use credit scores to determine how likely people will be to keep up with insurance premiums. This means that if your credit score isn’t up to par, you may find yourself paying more for your insurance, whether it’s auto, homeowners or renters.

Employers. If you want to work in a bank or another financial institution, you’ll probably have to undergo a credit check. It just goes with the territory. But did you know that any employer can require a credit check as a condition of employment? It’s true, and more and more employers are exercising this right. Why? Because your credit history shows how responsible you’ve been with your cash and, by extension, how responsible you can be expected to be on the job.

Landlords. Need to rent some new digs? Then be prepared to agree to yet another credit check. Your credit rating can help a landlord to decide if you’re someone who’s likely to pay on time, or even at all. If you’ve got late charge card account payments or open collections in your past, you may not get the lease that you’re after, or you may get the lease but find yourself stuck with a larger deposit than you expected.

Utility Companies. Need to establish service with the local utility company? Yep, you guessed it-another credit check. Many utility providers now use a credit check to determine how much you’ll need to pay as a deposit. If your credit history is spotty or nonexistent, you’ll probably be expected to pay more than someone with a clean credit report.

Your credit score is still yours

It’s true that more and more businesses are requiring credit checks, but that doesn’t mean that you can’t or shouldn’t protect your credit report.

By law, employers, potential employers and landlords must get your written consent before obtaining a report, so think carefully before granting someone access to your records.

Undo damage to your credit score

Is a low credit rating hurting your employment, housing and other opportunities? Then, do something about it. With a bit of work you can whip your credit score into shape and look as good on paper as you do in person.

This article is brought to you by www.JemCreditCards.com – More than charge cards, we build financial stability. A great place to compare the best charge card offers including Discover cards, Chase balance transfer cards, and much much more!

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Ways Consumers Are Able To Fix Bad Credit Ratings

Who else wants to learn how to raise their credit score by themselves? If you are anything like the vast majority of people who enjoy our credit and financial tips, the simple truth is that you’re already pretty frustrated at the high price (and confusing advice) offered by most credit clinics and counselors. As a matter of fact, in a recent study done for the United States Congress, there were MORE complaints about credit bureaus, non profit counseling centers AND repair clinics than all OTHER sorts of consumer complaints….COMBINED!

So why is there such high levels of misunderstanding when it comes to credit score restoration?

It’s actually quite simple. Money. And the hodge podge of special interests that have their hands in the pot! The truth? Credit counselors make money off of your poor credit. (yes….even the non profit ones) Lenders profit from charging you higher rates for your bad credit. Repair clinics and attorneys charge exorbitant rates to “fix” your poor credit. And the credit reporting bureau’s THEMSELVES make an absolute FORTUNE maintaining and reporting a file with your payment history….ALL so that the banks, lenders and financial institutions can decide whether or not to extend you credit!

You CAN Fix Your Credit Completely By Yourself……

And I’ve done it many a time….both for myself, AND for friends and family. The steps?

1. Get a copy of your credit report and score.

2. Learn to READ the Report (I.E…..understand which items are BAD and which are not)

3. Check your history for in-accurate information. (hint….you are entitled to 100% true and accurate reporting, and the SMALLEST in-accuracies are often grounds for removal)

4. Challenge the negative items that are NOT 100% accurate by filing disputes on each

5. Maintain records of all correspondence with the credit bureaus….and follow up diligently each time they respond.

The truth? It’s really that easy…and yes, you have to get a feel for doing it, to learn the little “tweaks” that improve your success rate with each dispute. But NO….you don’t need to pay thousands of dollars for those “tweaks”, and I’ve proven that over and over with my own credit. (and trust me….I’m NOT the smartest financial guy in the room by any stretch!)

The Bottom Line……

You are entitled to a 100% accurate credit report. The FCRA (Fair Credit Reporting Act) guarantees you this right. The ONLY way stuff comes OFF of your report (be it through your efforts or those of a pro) is through disputing negative entries as inaccurate. You CAN do this yourself….and you CAN begin today if you’re ready!

This article is brought to you by www.JemCreditCards.com – More than charge card accounts, we build financial stability. A great place to compare the best credit card offers including Discover credit cards, Chase balance transfer credit cards, and much much more!

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A Couple Of Facts About Consumer Credit Ratings – Why Debt To Credit Ratio Is Important!

If you have a relatively decent credit rating and you want to keep it that way, you need to find out what your debt ratio is and work to keep it in the green (k.e. good) zone. Your debt to credit ratio is the amount of debt that you have relative to the amount of credit available to you. For example, if you have a credit line of $10,000 on a charge card account and your balance is $5,000, your debt to credit ratio is 50%. If your balance is $10,000, and your charge card account is maxed out, your debt to credit ratio is 100%.

Many personal finance pros will tell you to try to maintain the debt to credit ratio under fifty percent. As the ratio goes up, your credit score goes down. So, in the example above, with a $10,000 credit card account limit, you would not want to carry a balance of more than $5,000.

Creditors use a variety of criteria and standards to make a judgement of your credit rating. Among all of the factors that they use, however, your debt to credit ratio consistently ranks pretty high on the list. For lenders, it is a great snapshot of your credit. By simply looking at this ratio on your credit report, a creditor can get a very clear idea of how deep in debt you are. Regardless of your credit score, if based on your debt to credit ratio, it seems like you are in deep financial trouble, you have a lot less chance of getting the loan that you desire. And, if you do manage to get the loan, odds are that you are going to end up paying a much greater interest rate than you probably had depended on.

If you want, you can easily use the information that you know about the debt to credit ratio to improve your credit rating. All you have to do is to pay down the balances on certain of your credit cards. Then set those charge card accounts aside. Don’t close your account but keep it open. This way it shows up on your credit report as you having access to a large pool of credit that you are not using.

The practical effect of this is that your debt to credit ratio is lowered. And, as a result, your credit score goes up. A second reason for keeping your credit accounts open is that credit reporting agencies tend to give a lot more credence to long held accounts than they do to shorter held ones. In other words, everything being equal, a credit card account that you have held for ten years is more positive for your credit rating than a card that is only two years old.

But, you would be making a mistake if you are depending on the credit report companies making sure that everything is correct in your credit report . Agencies are notorious for carrying credit errors for years on consumers records. It is up to you to keep track of everything in your credit report and correct the errors that you find in them.

This article is brought to you by www.JemCreditCards.com – More than credit card accounts, we build financial stability. A great place to compare the best credit card offers including Discover credit cards, Chase balance transfer credit cards, and much much more!

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How People Are Able To Build Good Credit Scores

The credit history has a very vital role to play in the life of a person. almost every aspect of life, including a home and a job is tied to this important document. Building a good credit history is a step by step process that requires you to put in conscious effort at every stage of life. while this may seem to be a tough task, it is not definitely impossible and will be worth the effort you put in.

First of all, if you are intent on building a good credit history, opt for just one credit card account and manage it wisely. One of the main reasons for Americans to fall prey to bad credit is the fact that they opt for multiple credit cards at the same time and end up spending on all of them and miss making their payments on time. In order to prevent all this from happening, opt for a card that you think is the best for your needs and use it sparingly.

Remember to make your payments on time consistently. Do not spend over thirty percent of the total credit limit available on the card as any amount spent above this limit gets reported to the credit bureau. Use the card only for making purchases and not for cash advances. Opting for a cash advance on your credit card can have devastating effects if you don’t repay it at the earliest. Not only will the cash advance attract a higher rate of interest, there is also no grace period associated with repayment of the cash and the finance charges are also higher.

When making purchases, opt for only essential commodities and refrain from buying expensive items that are out of your reach just because you have a charge card. Spending within the amount you can afford to repay is the key to building a good credit history.

Try paying off the balance on your credit cards at the end of each month. If you are not able to do so, at least make the minimum payment due on your card regularly. Skipping any payment can lead to a black mark on your credit history. Do not give rise to late payment charges which are also reported to the credit bureaus.

A good credit history will prove to be your ally when you apply for newer credit cards, loans or mortgages. Banks will favor your application form and be willing to offer you favorable terms.

This article is brought to you by www.JemCreditCards.com – More than credit cards, we build financial stability. A great place to compare the best credit card offers including Discover balance transfer credit cards, Chase balance transfer credit cards, and much much more!

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Ways Consumers Can Utilize Credit Card Accounts To Build Excellent Credit Ratings

These days, it’s hard to get by without having a good credit score. Just about every American citizen knows what a credit score is and a few things that will hurt your score, however, too many people don’t really know how to get a good credit rating. In this article, I will explain what a credit score is, how to get a good one, and how to keep it once you have it.

What Is A Credit Score?

A credit rating is a number that is calculated by the credit reporting agencies. Your credit rating follows you around no matter where you go. If you decide to get a loan or a credit card account, your credit score will play a crucial role in the decision of the lending institution that you applied for the loan at. The higher your credit rating is, the more likely you become to get approved for the loan. But why is this? Lenders use credit scores to find out if a borrower is worthy of the loan being asked for. The credit reporting agencies use your past payment history on many loans to calculate the risk for the lending institutions. If you are a high risk borrower, you will have a low credit score, if you are a low risk borrower, your credit score will be higher.

How To Build Your Credit Score With Credit Cards.

Fortunately, you ultimately are the only person that can affect your credit score. There are many ways to go about building credit history to raise your credit rating. However, I have found that using charge cards to build your credit score is the least time consuming way to go. If you can get approved for a unsecured credit card account, this is what you will want to use. However, if you are reading this article, you most likely don’t have very good credit and in that case you will need to go with another option. There are a great deal of credit card accounts out there that were designed to help consumers with bad credit. These charge card accounts are called secured credit card accounts.

What Is A Secured Credit Card?

Secured credit cards are credit card account accounts that are designed for people with limited to no credit history or bad credit history. With secured charge card account accounts, the lending institutions take no risk while giving you the opportunity to borrow cash and show that you are worthy of an unsecured credit card. I know the question, “if you are borrowing cash, how is it that the banks are not taking a risk?”. The answer is a pretty simple one. Secured charge cards start with the word secured because you need to place a cash security deposit with the lending institution to get the card. This cash deposit then becomes your credit limit. In a sense, you are borrowing your own money so the banks are not taking a risk by lending it to you.

Once I Get The Secured Credit Card, What Do I Need To Do?

Once you get the secured credit card account, it is important that you use the card properly. Here are a couple rules to follow when using secured credit cards to build your credit score:

Rule #1: Never spend more than 50% of your credit limit – Your credit limit is the amount of cash you are able to spend using the charge card. Spending more than 50% of your credit limit demonstrates to the lending institutions that you are in need of cash and will make you look like a high risk borrower.

Rule #2: Pay on time! – Always make sure to pay your charge card bills on time. It is extremely important to make sure that your payments are not only sent on time but also received on time. A great way to ensure that your payments will make it to the lending institution on time is to mail them out at least 2 weeks in advance.

Rule #3: Show consistency in your payments. – Showing the lending institutions that you not only are able to make your payments but you make them on time and budget them will will dramatically increase your credit score. Always pay more than your minimum payment and make sure that you stay consistent with your payments.

After about a year following these rules, you are almost guaranteed to have a good credit rating. The key is to maintain the credit ratings once you have them and that is pretty simple. Just continue to follow the same rules and you should be fine!

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How Adverse Credit Cards Can Help You Improve Credit Scores

When findings different ways to improve your credit rating improve your credit rating , always look for viable option that helps you repair your scores whilst improve the score, like using an adverse credit cards adverse credit cards customers with bad history of credit.

What is Credit Score?

Your credit score assist lending companies on your eligibility as a potential borrower. It starts from 300 and can get as high as 850. The higher your score is, the lower the risk for lending companies is. Having a credit score below 700 won’t affect you in a large way although you will end up paying higher interest rates, a way for lending companies to make sure you payback the money owed.

Your credit grade are measured along few factors:
• 35% – credit history
• 30% outstanding debt
• 15% – length of time that you had a credit
• 10% – number of inquiries you made in the past
• 10% – the ten percent is based on different types of credit account you currently hold

What options do I have to improve my credit score?

First method to improve rating of your credit is to use bad credit cards bad credit cards. How can you do that? It’s mere. What you need to do is pay your bills on time. This is one of the most important things you can do to increase your credit score. Setting up an automated payment for your credit card also makes sure your bills are paid on time and that you don’t get any reminders. Another thing you can do is close poor credit cards you do not use.

So, how to improve credit rating fast?

The first thing you can do is to make sure that payments to lending companies are always made on time. If you suspect the payment will be delayed, always notify the bank about it. Any outstanding defaults on your accounts that reflect should be paid off at the earliest.

You will need to obtain your credit history and check these carefully, making sure everything is correct. You should contact your credit rating agencies if you feel few vendors do multiple searches on your application as this may affect your score.

Use the credit on your credit cards to pay off any pending debt on your account. You can speed up this process by opening a variety of accounts, but you should clear balances from time to time to avoid high interest charges. Also, don’t miss any payment, because instead of making your situation better, it will make it worse.

Make sure you stop applying for other applications when you have been reduced by a lender recently as this will only cause more rejections whilst affecting to your credits score. This can also make your credit score worse. All in all, if your credit score is low, you can raise it by using your credit cards.

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