YOUR CREDIT
The Internet has opened many doors for us;
however, that is a mixed blessing. It has also made your
individual credit score easily accessible and many of us
have no idea what our score is or what helped create that
number.
The FICO credit score is a result of many
parameters in your financial history: how timely you pay
your bills, whether you have any outstanding liens, too many
credit cards, etc. When you apply for credit, companies will
look at this score in their approval process.
How do you measure up?
| Score 700 – 850: |
Smooth
loan process; best interest rates |
| Score 550 – 699: |
Medium
risk; higher interest rates |
| Score 300 – 549: |
Sorry,
no loans or credit cards |
Find out where you stand by ordering your
credit report from the three major companies: Equifax
Information Services, LLC, 800-685-1111; Experian,
888.EXPERIAN; TransUnion LLC Consumer Disclosure Center,
800.888.4213. I suggest you get a report from each of these
(they charge for this service) and check them thoroughly. If
there are errors or surprises, you can dispute them through
the credit agencies, or you can contact the creditor
directly.
Are you counting on a new car, a new roof,
new furniture? Before you talk financing, send for your
credit report and FICO score. If there are errors or other
surprises, contact creditors to make corrections or
negotiate settlements. Also, be sure to notify the credit
bureau of your dispute.
Legitimate black marks on your credit
won't disappear quickly. (It takes seven years; ten for
bankruptcy.) However, time and your diligence can turn
things around. Lenders will give recent responsible activity
due consideration.
| KEEPING CREDIT
WORTHY |
It
helps to:
- Pay all bills on time
- Maintain only 2-4 credit cards
- Close unused credit or store
cards
- Keep balances well below the
limit
- Pay more than the minimum
required
- Establish long-term credit
histories
|
Understand your credit
score and stay on top of it!
In our credit-driven society, taking
charge of your credit should be an ongoing process. Your
FICO score is a snapshot in time, not set in concrete.
Review it each year for errors that may have crept in and to
monitor your progress. You have the power to know it,
raise it, maintain it.
| WHAT HELPS: |
WHAT HURTS: |
- Pay all bills and pay on time
- Maintain 2-4
credit cards
- Close unused
credit or store cards
- Keep balances well
below the limit
- Pay more than the
minimums
- Establish
long-term credit history
|
- Too many credit
cards or zero cards
- High non-mortgage
debt
- Delinquent
accounts
- Frequent job or
address changes
- Charge Off's*
(bills marked uncollectible)
- Bankruptcy
|
*A deal-killer; contact
creditor, clear it up and clear it off.
Big Three Credit Bureaus
(The cost to order a credit report/score
ranges from free to $12.50)
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