I’m sure we can all agree on how important it is to have a good credit rating. This is because your being viewed as worthy of credit is based on this credit rating.

A bad credit history or bad credit habits will place “black marks” on your credit profile. Late payments, having an account assigned to a collection agency, and of course bankruptcy will get you a bad credit rating.

Establishing good credit habits and therefore a good credit rating will improve your credit worthiness. This will be reflected in lenders extending to you substantially lower interest rates and better deals on credit offers. Continue reading ‘4 Steps to Get Good Credit’ »

Are you a Credit Card Addict? Can’t resist pulling out that little plastic card and buy whatever your eyes tell you to buy? Stop it. How can you get debt relief and debt reduction. Here are 5 steps that can help you reduce credit card debt.

The 5 Steps to Credit Card Heaven

1. Look at your spending habits and try to see why you are so deep in debt or just heading that direction. You must take complete control of how you use your credit cards. Set a realistic goal.

2. Find out your alternatves, your choices. What can you do or plan that will stop the credit debt slide? Put away the cards? Put them in the freezer, cut them up, leave them at home when you go out? Sound drastic? Until you control your spending they may be the choice you must take. Think about it. Continue reading ‘Reduce Credit Card Debt in 5 Steps’ »

FICO ratings are comprised of five factors. Numbers are given for each item, and a high score is most favorable. The factors are listed below in order of importance.

1. Payment Rating (totals 35)% of your score) Paying monthly bills on time and in full has the greatest positive impact on your credit score. Late payments, liens and charge-offs all have a negative impact. Missing a high payment will have a more derogatory impact than missing a low payment, and delinquencies that have occurred in the last two years carry more weight than older items.

2. Outstanding Credit Balances (totals thirty% of your score)This factor marks the ratio between the outstanding balance and available credit. Ideally, the consumer should make an effort to keep balances as close to zero as possible, and at least ten% below the available credit limits. (A balance thirty% below the available credit limit is better.)

3. History (totals 15% of your score) This portion of the credit score number indicates the length of time since a particular credit line was established. A seasoned person will always be more efficient in this area.

4. Types of Credit (totals ten% of your score) A mix of auto loans, credit card and mortgages is more positive than a concentration of monthly bills from credit card only. Continue reading ‘FICO Rating: 5 Factors Of A Great FICO Score’ »

Do you have a lot of debt? Too many unpaid bills? Have you lately faced a major financial set back, such as a bankruptcy? Have you simply not had credit long enough to set up, good credit? Have you defaulted on a loan, missed a tax payment, or recently been reported to a collection agency? The problems that cause your credit problems should confirm how you decide to better your credit score. As you read through this article and others I have published, highlight or make a note of those tips that apply to you and from them make a checklist of things you can do that would help your credit status, improve. When you look for, professional credit counseling or credit advise, counselors will generally work with you to help you develop a personalized method that specially addresses your credit problems and financial history. Now, with this article and others I have published, you can develop a similar method on your own – in your own time and at your own cost.

When developing your action plan, know where most of your credit score is coming from:

1) Your credit history (accounts for more than a third of your credit score in some cases). Whether or not you have been a good credit risk in the past, is considered the best measure of how you will respond to debt in the future. For this reason, late payment, loan defaults, unpaid taxes, bankruptcies, and other unmet debt obligations will count against you the most. You can’t do much about your financial past now, but beginning to pay your bills on time – starting today – can help boost your credit score in the future. Continue reading ‘A method for dealing with your credit score’ »

All credit purchases and payments thereof are fed to a set of pre-determined evaluating factors to get numerical markings or points, the total of which, called credit score serves as an indicator of the creditworthiness of the debtor. This indicator of three figures having 850 points as upper limit, can guide the lenders in no uncertain terms, the feasibility and viability of the debtor to repay the credit sought. Unless the applicant has reasonably good score, his application is destined to attract an abnormal rate of interest, if its not denied.

One should always strive to be at par with two-third population of the US by attaining credit score of usually acknowledged as healthy 700 points. Maintaining regular and timely payment schedule of credit card balances and invoices in full and sustaining it over a reasonably long period can help one achieve the desired target.

On the other hand, one can never attain a fair score, leave aside 700 points, if he is an extravagant purchaser on a buying spree who goes on building up credit without caring or giving any thought to ways of repayment.

As the payments are delayed on a regular basis and the calls from the creditors are unanswered, the credit record will account for such actions or lack of it. Continue reading ‘What Is A Good Credit Score – A Useful Credit Score’ »

If you don’t understand how your credit score works, you will also be at the mercy of any firm that tries to tell you how you can improve your score – on their conditions and at their price. In general, your credit score is a number that lets lenders know how much of a credit liability you are. The credit score is a number, commonly between 300 and 850, that lets lenders know how well you are paying off your debts and how much of a credit risk you are.

In general, the greater your credit score, the better credit risk you make and the more probable you are to be given credit at excellent rates. Scores in the low 600s and below will often give you probelms in finding credit, while scores of 720 and above will normally give you the best interest rates out there. Nevertheless, credit scores are a lot similar to GPAs or SAT scores from college days – while they give others a quick image of how you are doing, they are explained by people in different ways.

Some lenders put greater significance on credit scores than others. Some lenders will work with you if you have credit scores in the 600s, while others give their best rates only to those creditors with very high scores indeed.Some lenders will look at your complete credit report while others will accept or reject your loan application based purely on your credit score.

The credit score is derived on your credit report, which consist’s of a history of your past debts and repayments. Credit agencies use computers and mathematical calculations to arrive at a credit score from the information enclosed in your credit report. Each credit agency uses separate solutions to do this (which is why you will have different scores with different companies) but most credit bureaus use the FICO system. FICO is an acronym for the credit score calculating software offered by Fair Isaac Corporation company. This is by far the most used software since the Fair Isaac Corporation made the credit score model used by many in the financial industry and is still acknowledged, one of the leaders in the field. In fact, credit scores are frequently called FICO scores or FICO ratings, although it is important to realize that your score may be tabulated using other software.

One other thing you may want to understand about the software and mathematics that goes into your credit score is the fact that the math used by the software is based on research and approximate mathematics. This is an important and easy concept that can help you understand how to improve your credit score. In understandable terms, what this means is that your credit score is in a way calculated on the same principles as your insurance premiums. Your insurance company likely asks you questions about your health, your lifestyle habits (such as whether you are a smoker) because these bits of information can let the insurance company know, how much of a risk you are and how likely you are to make substantial claims, later on. This is based on research. Continue reading ‘Where do credit scores come from ?’ »