Credit is the key to wealth building. Before you embark on any financial transaction you must understand your credit. Do you have good credit, ok credit, at risk credit?
A credit report is a snapshot of one’s payment history. It is used by lenders, insurance companies, landlords, and employers to determine a consumer’s willingness to pay and demonstrate their credit worthiness. One’s credit report and their FICO score (ranging from 300-850) will help financial institutions decide if one is eligible for a loan and if so what type of interest rate they can obtain. As consumers, we must use our credit reports to prove to others that we are a good risk when they consider us as a potential borrower, employees, tenants, etc.
Your credit score determines the interest rates you receive on home loans, car loans and credit cards. The better your credit score is the better the interest rate.
When you pay a lower interest rate (also considered the cost of taking the loan out) you save thousands of dollars in wasted interest and you build your equity much faster when you buy a home or any real estate investment.
FCLS understands that along the way good people face credit challenges. It is important to know that you deserve respect and fair lending practices regardless of your credit history. Yes you will pay higher interest rates on your loans; however you do not have to be gouged.
You can rebuild your credit regardless of your past history. The Fair Isaac Company, the company who created the system that tabulates your score, weighs the negatives and the positives through their software scoring system. Scores change daily based on activity and length of time since negative activity. If you work on adding new credit and rebuild your payment history your score will increase over time.
Consumers often surrender their credit and if you surrender your credit you will never build a solid financial future for your family.
Every year consumers are entitled to receive a free credit report from www.annualcreditreport.com.
ORDER YOUR CREDIT TODAY AND GET EMPOWERED!
FACTORS THAT AFFECT CREDIT SCORE
Payment History- 35%
It is recorded on your credit report each time you are 30/60/90 days on any of your credit obligations.
The more recent the late payment, the more of an impact it has on your credit score. Even if you are late on a $5 payment your score will be affected. If you do end up being late, catch up.
Amounts Owed- 30%
Consumers never want to appear as if they are overextended.
Aim to have a balance of less than 50% of the limit on all of your revolving accounts. Concentrate on paying down the balances each month. If you only pay the minimum payment required each month, a $3,000 credit card debt can take up to 20 years to pay off.
Length of Credit History- 15%
The longer an account is opened and in good standing with a particular creditor, the better. Avoid transferring balances too often because this will eliminate these relationships. It is important to establish a good history with our creditors.
New Credit- 10%
When applying or refinancing, keep all applications within 30 days of each other.
When you request a credit report yourself it will not affect your credit score.
Credit can be reestablished by opening new accounts and paying them on time.
Types of Credit Used- 10%
Diversify by having revolving accounts, installment accounts, merchant accounts.
Limit applications for new accounts, having 3-5 credit cards is sufficient.
TIPS TO IMPROVE YOUR CREDIT SCORE
Pay down your debts to below 50% of the credit limit. – If you have a $ 1,000 dollar credit limit on a credit card try to keep the balance below $500.
Make Payments on Time even after late pays.- A $10 late payment reported to the credit agencies, can pull your credit score down as drastically as a $200 payment. If you have been late get caught up. The further away from the late payments you are, the higher your score will get. Your score can be 550 today, because of a recent car late and increase within months if you get caught up and pay on time.
Check credit reports periodically and correct all inaccurate information. -Mistakes happen from late pays to credit fraud. Keeping up with your credit report allows you to catch the mistakes early enough to correct them. Consumers are entitled to receive a free credit report once a year from all credit agencies log on to www.annualcreditreport.com.
Pay off all past due and collection accounts- These accounts can come back to haunt you and bring down your score. After 7 years, you can write to Experian, Equifax or Transunion to have the collections removed. However if the debt is sold to another company before the 7 years is up even if it is 6 years and 11 months later, the collection company can add it on to your credit and the 7 year clock will start over again.
This means you could have a 700 credit score which is considered A credit and drop drastically depending on the debt that is added. Collections can also be placed as a lien on your property. This means if you decide to sell or refinance your home you will not be able to unless you pay off the collection and all accumulated interest.
Go back and negotiate your collections 25 cents on the dollar or 50 cents on the dollar with the debt collector. Also ask them for a letter of deletion before you make the payment. If you delete the collection it will be better than just showing it paid in full. Deleting collections or late pays will increase your score paying off collections will not but it will allow the clock to stop so your credit score can bounce back.
Open up a secured credits- When your credit score drops banks will not extend credit on credit cards without security deposits. Go to your local bank and apply for a secured card. The secured card allows the bank to extend a line of credit to you secured by a set amount you deposit in the bank. You can use the card and make payments as you would a regular card. You can only use up to the amount deposited. The card will start to raise your score as you use it and make monthly payments. If the card does not show up on your credit, simply write into the credit bureaus, Experian, Equifax, and Transunion and give them the card number, the name of the bank you have the card with, your address, your social security number, your name and they have 30 days to add the credit card onto your credit after they verify it with the creditor.
Retain older accounts proving good history and avoid opening unnecessary accounts- Closing accounts can hurt you keep your accounts open.
Prevent unsolicited promotional inquiries- You can opt out at www.optoutprescreen.com
A credit report is a snapshot of one’s payment history. It is used by lenders, insurance companies, landlords, and employers to determine a consumer’s willingness to pay and demonstrate their credit worthiness. One’s credit report and their FICO score (ranging from 300-850) will help financial institutions decide if one is eligible for a loan and if so what type of interest rate they can obtain. As consumers, we must use our credit reports to prove to others that we are a good risk when they consider us as a potential borrower, employees, tenants, etc.
Your credit score determines the interest rates you receive on home loans, car loans and credit cards. The better your credit score is the better the interest rate.
When you pay a lower interest rate (also considered the cost of taking the loan out) you save thousands of dollars in wasted interest and you build your equity much faster when you buy a home or any real estate investment.
FCLS understands that along the way good people face credit challenges. It is important to know that you deserve respect and fair lending practices regardless of your credit history. Yes you will pay higher interest rates on your loans; however you do not have to be gouged.
You can rebuild your credit regardless of your past history. The Fair Isaac Company, the company who created the system that tabulates your score, weighs the negatives and the positives through their software scoring system. Scores change daily based on activity and length of time since negative activity. If you work on adding new credit and rebuild your payment history your score will increase over time.
Consumers often surrender their credit and if you surrender your credit you will never build a solid financial future for your family.
Every year consumers are entitled to receive a free credit report from www.annualcreditreport.com.
ORDER YOUR CREDIT TODAY AND GET EMPOWERED!
FACTORS THAT AFFECT CREDIT SCORE
Payment History- 35%
It is recorded on your credit report each time you are 30/60/90 days on any of your credit obligations.
The more recent the late payment, the more of an impact it has on your credit score. Even if you are late on a $5 payment your score will be affected. If you do end up being late, catch up.
Amounts Owed- 30%
Consumers never want to appear as if they are overextended.
Aim to have a balance of less than 50% of the limit on all of your revolving accounts. Concentrate on paying down the balances each month. If you only pay the minimum payment required each month, a $3,000 credit card debt can take up to 20 years to pay off.
Length of Credit History- 15%
The longer an account is opened and in good standing with a particular creditor, the better. Avoid transferring balances too often because this will eliminate these relationships. It is important to establish a good history with our creditors.
New Credit- 10%
When applying or refinancing, keep all applications within 30 days of each other.
When you request a credit report yourself it will not affect your credit score.
Credit can be reestablished by opening new accounts and paying them on time.
Types of Credit Used- 10%
Diversify by having revolving accounts, installment accounts, merchant accounts.
Limit applications for new accounts, having 3-5 credit cards is sufficient.
TIPS TO IMPROVE YOUR CREDIT SCORE
Pay down your debts to below 50% of the credit limit. – If you have a $ 1,000 dollar credit limit on a credit card try to keep the balance below $500.
Make Payments on Time even after late pays.- A $10 late payment reported to the credit agencies, can pull your credit score down as drastically as a $200 payment. If you have been late get caught up. The further away from the late payments you are, the higher your score will get. Your score can be 550 today, because of a recent car late and increase within months if you get caught up and pay on time.
Check credit reports periodically and correct all inaccurate information. -Mistakes happen from late pays to credit fraud. Keeping up with your credit report allows you to catch the mistakes early enough to correct them. Consumers are entitled to receive a free credit report once a year from all credit agencies log on to www.annualcreditreport.com.
Pay off all past due and collection accounts- These accounts can come back to haunt you and bring down your score. After 7 years, you can write to Experian, Equifax or Transunion to have the collections removed. However if the debt is sold to another company before the 7 years is up even if it is 6 years and 11 months later, the collection company can add it on to your credit and the 7 year clock will start over again.
This means you could have a 700 credit score which is considered A credit and drop drastically depending on the debt that is added. Collections can also be placed as a lien on your property. This means if you decide to sell or refinance your home you will not be able to unless you pay off the collection and all accumulated interest.
Go back and negotiate your collections 25 cents on the dollar or 50 cents on the dollar with the debt collector. Also ask them for a letter of deletion before you make the payment. If you delete the collection it will be better than just showing it paid in full. Deleting collections or late pays will increase your score paying off collections will not but it will allow the clock to stop so your credit score can bounce back.
Open up a secured credits- When your credit score drops banks will not extend credit on credit cards without security deposits. Go to your local bank and apply for a secured card. The secured card allows the bank to extend a line of credit to you secured by a set amount you deposit in the bank. You can use the card and make payments as you would a regular card. You can only use up to the amount deposited. The card will start to raise your score as you use it and make monthly payments. If the card does not show up on your credit, simply write into the credit bureaus, Experian, Equifax, and Transunion and give them the card number, the name of the bank you have the card with, your address, your social security number, your name and they have 30 days to add the credit card onto your credit after they verify it with the creditor.
Retain older accounts proving good history and avoid opening unnecessary accounts- Closing accounts can hurt you keep your accounts open.
Prevent unsolicited promotional inquiries- You can opt out at www.optoutprescreen.com
