Archive for May, 2009
nicky asked:
I am looking to buy a house and want to seek a few different options before buying. If I have them all pull my credit will this cause my score to decrease? Please tell/show me how you know this.
Denisha Ervay
I am looking to buy a house and want to seek a few different options before buying. If I have them all pull my credit will this cause my score to decrease? Please tell/show me how you know this.
Denisha Ervay
WENDY D asked:
I need to refinance my house but my credit score is 525. I need it at 580 minimum to be able to refi with a good rate and get cash out. Does anyone know how to get a score up that much in a short amount of time. I know I owe about $400.00 on credit cards and I have some lates on there. I am going to pay the credit cards off, but does anyone know how I can get that score up within 2-3 mths or so?
Barney Fager
I need to refinance my house but my credit score is 525. I need it at 580 minimum to be able to refi with a good rate and get cash out. Does anyone know how to get a score up that much in a short amount of time. I know I owe about $400.00 on credit cards and I have some lates on there. I am going to pay the credit cards off, but does anyone know how I can get that score up within 2-3 mths or so?
Barney Fager
he words “credit score” into any major search engine and you will quickly realize that knowing your credit score – and improving it – is big business. There are a number of companies out there that specialize in teaching individuals about the importance of their credit score.
In truth, your credit score holds a much larger influence on your life than you may realize. Credit scores are hard to escape and will be with you throughout your life. This will influence the interest rates you pay on purchases through to approval for major loans such as a home loan. Once you realize how important your credit score can be for your financial portfolio and lifestyle, it’s integral that you take steps to understand and improve it as much as possible.
Your credit score is your financial report card. Whether is good or bad, any financial document under yoiur name is going to impact your credit score. Conversely, if you are just starting out and have few financial documents with your name associated with them, you might have a lower credit score simply because you do not yet have a strong credit history.
Credit cards can be either your best friend or worse enemy with your credit score. If you are young or just starting out independently, it is often recommended that you secure a credit card to begin your credit history. By establishing a low-interest, low limit credit card, you can start to build a strong credit history by paying off your bills each month. In addition, putting your name on the utilities or establishing a good record of payment with your rent or mortgage can also increase your credit score. When you apply for a credit card in the future or wish to lower the interest rate on your current credit card, your credit company will first look to your credit score and payment history. If both of you have a good credit score then you are likely to benefit from a lower interest rate.
However, if you have been behind on payments or have excessive debt on the credit card, you might be turned down due to a lower credit score. It’s important to understand that using a credit card wisely can help you, but taking advantage of the credit card debt will destroy your credit score in the long run, affecting numerous future financial purchases.
When you go to buy a home, for example, the bank providing the home loan will consider your credit score before approving your loan or giving you a lower interest rate. In addition, if you plan to purchase a new car in the future, the car loan amount will also depend on your credit score.
Take charge of your financial future by analyzing and understanding your credit score and how much it can change your life.
By: Richard Greenwood
About the Author:
In truth, your credit score holds a much larger influence on your life than you may realize. Credit scores are hard to escape and will be with you throughout your life. This will influence the interest rates you pay on purchases through to approval for major loans such as a home loan. Once you realize how important your credit score can be for your financial portfolio and lifestyle, it’s integral that you take steps to understand and improve it as much as possible.
Your credit score is your financial report card. Whether is good or bad, any financial document under yoiur name is going to impact your credit score. Conversely, if you are just starting out and have few financial documents with your name associated with them, you might have a lower credit score simply because you do not yet have a strong credit history.
Credit cards can be either your best friend or worse enemy with your credit score. If you are young or just starting out independently, it is often recommended that you secure a credit card to begin your credit history. By establishing a low-interest, low limit credit card, you can start to build a strong credit history by paying off your bills each month. In addition, putting your name on the utilities or establishing a good record of payment with your rent or mortgage can also increase your credit score. When you apply for a credit card in the future or wish to lower the interest rate on your current credit card, your credit company will first look to your credit score and payment history. If both of you have a good credit score then you are likely to benefit from a lower interest rate.
However, if you have been behind on payments or have excessive debt on the credit card, you might be turned down due to a lower credit score. It’s important to understand that using a credit card wisely can help you, but taking advantage of the credit card debt will destroy your credit score in the long run, affecting numerous future financial purchases.
When you go to buy a home, for example, the bank providing the home loan will consider your credit score before approving your loan or giving you a lower interest rate. In addition, if you plan to purchase a new car in the future, the car loan amount will also depend on your credit score.
Take charge of your financial future by analyzing and understanding your credit score and how much it can change your life.
By: Richard Greenwood
About the Author:
Richard Greenwood – Director of Online banking magazine The Money Web. The free online magazine features articles from a wide range of finance insiders to provide excellent tips.
Larry Purfeerst
skunk_wink asked:
What does your credit score have to be to get a 7000 dollar motorcycle loan? whats the lowest score you can have?
Beth
What does your credit score have to be to get a 7000 dollar motorcycle loan? whats the lowest score you can have?
Beth
CreditScore101101 asked:
http://www.videocreditscore.com – What’s a Good Credit Score – Watch this short video discussing tips to get good credit scores.
Javier Shappen
eHow asked:
Better credit leads to better interest rates and a raise in credit score. Learn about raising a credit score from a registered financial consultant (RFC) in this free personal finance video.
Jerrell Bohl
levselector asked:
Start with getting your 3 credit reports and 3 FICO scores from http://www.myfico.com. Once you received and analyzed the information – follow these 5 steps: (1) Late records. Call your lenders and ask them to remove the late records in exchange of you making the payment. Or just say that you don’t recall being late. It may be as simple as a phone call. (2) Settle with lenders. Negotiate that they will remove the bad records from your file retroactively instead of just reporting the debt as …
Margarette Knouse
ihagurl asked:
Ex: Friedmans has gone bankrupt (all locations closing why would I need it) and I just PIF. I decided to close it, but then wondered it doing so would hurt my credit score, since my debt to credit ratio has just gone down.
Trenton Valade
Ex: Friedmans has gone bankrupt (all locations closing why would I need it) and I just PIF. I decided to close it, but then wondered it doing so would hurt my credit score, since my debt to credit ratio has just gone down.
Trenton Valade
Do you have a low credit score?
If your credit score is below 700, you may not qualify for some of the best interest rates on credit cards, loans or mortgages. This means that just by having a credit score of 695, instead of 725 (just an example), you may end up paying thousands more in interest on any new credit you are granted, which you can avoid by just taking some simple steps to increase your credit score before applying for a new personal loan, auto loan or mortgage. It is widely believed that a credit score of 720 or higher is ideal.
How to improve a low Credit Score
If you have a recent bankruptcy on file, repossession, foreclosure, missed or late payments… it will take time to bring your credit score back up after such a blow. If you are in this position, in the mean time just be sure to borrow “within your means” (although you may have trouble getting approved for any new credit) and don’t overextend yourself. Keep paying your bills on time, and you will be back on the road to raising your credit score.
If you pay your bills on time, don’t have a recent bankruptcy on your record, and don’t have any missed payments or collections on file, look at your credit card balances. Normally you will want to keep your debt-to-credit limit ratio, on your credit card accounts, below 25%. If you owe more than 25% of your total credit limit on your credit cards, consider paying them down.
Example: if you have a credit card with total credit line of $10,000, and you have a balance of $2,500 on the card, you would owe 25% of your total credit line on that card.
Also keep in mind that even if you pay your credit card balance off each month, it still may be reported to the credit bureaus that you are carrying a balance on that card. It depends on what time of the month your credit card issuer reports to the credit bureaus, they will list whatever your balance is on the day they report it. However, most (if not all) lending institutions are aware of this, so this is generally not something to worry about.
Too many open credit card accounts
Also, too many open credit card accounts can be a bad thing. But, if you already have several open credit card accounts in good standing, don’t cancel them, the added “good” credit history can help your credit score. If you find that you have way too many open credit card accounts and you have decided to cancel some of them, be sure to cancel the most recently opened accounts. Keep the oldest accounts open. Normally the longer your payment history on an account, the better your credit score will be.
Try not to open any new credit card accounts that aren’t necessary. Generally when you open a new credit account, it will lower your credit score slightly, at least for a short period of time.
How you manage your “revolving credit” (credit card accounts) is a big factor in determing your credit score.
Newly Opened Credit Accounts
Usually your credit score will take a slight hit from newly opened credit accounts such as credit cards, auto loans, or mortgages. How many points your score will decrease depends on how many times you have applied for credit in recent months.
However, this decrease is only temporary, your score should rise again after several more months of making your payments on time. Normally this is not something to worry about, unless you have submitted many applications for new credit in a short period of time. That may indicate to credit issuers that you are beginning to overextend yourself (applying for too much credit), or that you are being denied credit and you keep trying other lenders hoping for a different result.
Short Credit History?
If you have a very short credit history (length of time you have been using your credit), that can also be a reason as to why you have a low credit score. Keep paying your bills on time and follow good overall credit management, and rest assured – with time – your score will rise!
No Credit History?
If you have absolutely no credit history, your credit score will most likely be low to start with. You can get started by applying for a credit card in an attempt to establish your credit history, or if you are trying to obtain an auto loan, but haven’t had any luck getting approved because of a short credit history (or no credit history), you can ask someone you trust to help you by co-signing on a loan with you.
These are just 2 of the ways you can start establishing your credit, but probably the 2 most common ways. When you are approved for your first credit account, be sure to pay your bill(s) on time, and you will be on your way to a better credit score!
By: Jake Rustenhoven
About the Author:
If your credit score is below 700, you may not qualify for some of the best interest rates on credit cards, loans or mortgages. This means that just by having a credit score of 695, instead of 725 (just an example), you may end up paying thousands more in interest on any new credit you are granted, which you can avoid by just taking some simple steps to increase your credit score before applying for a new personal loan, auto loan or mortgage. It is widely believed that a credit score of 720 or higher is ideal.
How to improve a low Credit Score
If you have a recent bankruptcy on file, repossession, foreclosure, missed or late payments… it will take time to bring your credit score back up after such a blow. If you are in this position, in the mean time just be sure to borrow “within your means” (although you may have trouble getting approved for any new credit) and don’t overextend yourself. Keep paying your bills on time, and you will be back on the road to raising your credit score.
If you pay your bills on time, don’t have a recent bankruptcy on your record, and don’t have any missed payments or collections on file, look at your credit card balances. Normally you will want to keep your debt-to-credit limit ratio, on your credit card accounts, below 25%. If you owe more than 25% of your total credit limit on your credit cards, consider paying them down.
Example: if you have a credit card with total credit line of $10,000, and you have a balance of $2,500 on the card, you would owe 25% of your total credit line on that card.
Also keep in mind that even if you pay your credit card balance off each month, it still may be reported to the credit bureaus that you are carrying a balance on that card. It depends on what time of the month your credit card issuer reports to the credit bureaus, they will list whatever your balance is on the day they report it. However, most (if not all) lending institutions are aware of this, so this is generally not something to worry about.
Too many open credit card accounts
Also, too many open credit card accounts can be a bad thing. But, if you already have several open credit card accounts in good standing, don’t cancel them, the added “good” credit history can help your credit score. If you find that you have way too many open credit card accounts and you have decided to cancel some of them, be sure to cancel the most recently opened accounts. Keep the oldest accounts open. Normally the longer your payment history on an account, the better your credit score will be.
Try not to open any new credit card accounts that aren’t necessary. Generally when you open a new credit account, it will lower your credit score slightly, at least for a short period of time.
How you manage your “revolving credit” (credit card accounts) is a big factor in determing your credit score.
Newly Opened Credit Accounts
Usually your credit score will take a slight hit from newly opened credit accounts such as credit cards, auto loans, or mortgages. How many points your score will decrease depends on how many times you have applied for credit in recent months.
However, this decrease is only temporary, your score should rise again after several more months of making your payments on time. Normally this is not something to worry about, unless you have submitted many applications for new credit in a short period of time. That may indicate to credit issuers that you are beginning to overextend yourself (applying for too much credit), or that you are being denied credit and you keep trying other lenders hoping for a different result.
Short Credit History?
If you have a very short credit history (length of time you have been using your credit), that can also be a reason as to why you have a low credit score. Keep paying your bills on time and follow good overall credit management, and rest assured – with time – your score will rise!
No Credit History?
If you have absolutely no credit history, your credit score will most likely be low to start with. You can get started by applying for a credit card in an attempt to establish your credit history, or if you are trying to obtain an auto loan, but haven’t had any luck getting approved because of a short credit history (or no credit history), you can ask someone you trust to help you by co-signing on a loan with you.
These are just 2 of the ways you can start establishing your credit, but probably the 2 most common ways. When you are approved for your first credit account, be sure to pay your bill(s) on time, and you will be on your way to a better credit score!
By: Jake Rustenhoven
About the Author:
Jake Rustenhoven is the webmaster of http://www.freebiecreditreport.com, and the author of many other self-help and finance related articles such as this one.
Craig Summerhays
Sure, the economy may be flailing, but learning to preserve and maintain your creditworthiness and improve your credit score is still extremely important. If you’ve spent any time watching or reading the news, you’re aware that bad mortgages obtained with faulty credit lending practices and other flawed methods have sent the economy into a tailspin.
Creditworthiness is defined as being financially established to the point where lending credit is deemed a sound judgment by a bank or financial institution. Your credit score determines many things – if you’re responsible enough to re-pay a loan on time and not default as well as your experience handling lines of credit and interest rates. In the eyes of a financial institution, your creditworthiness will help you acquire a loan for a car, house, or other large asset much easier.
The Dynamics: Maintain and Improve Your Credit Score
Developed as a mortgage tool in the mid 1990s (1), your credit, or FICO (R), score essentially determines what, if any, loans you are eligible for and the amount of interest you’ll be required to pay. As your score decreases, the rate of interest increases. Credit companies often say that timely payments are perhaps the most important factor to foster and continually improve a credit score that is high or within an acceptable range.
Your credit score is broken down into many factors: 35% is your payment history; 30% is the current amount you owe; 15% is the time you’ve had your credit lines open and active; 10% comprises new credit lines; and the remaining 10% is the type of credit you use (2). If you’ve fallen behind on payments and the amount you owe is increasing, your creditworthiness (in the eyes of the lending institutions) may be floundering.
Send Away for Your Credit Report – for Free!
Are you interested in seeing what’s on your credit report and determine your creditworthiness for yourself? It’s easy to get this information. Simply write a letter stating that you wish to receive your credit report from the three following credit reporting agencies, and you’ll be mailed your report free of charge when requests are made once within each year. Please note that there is an additional fee to obtain your credit score from the credit reporting agencies.
Experian, www.experian.com: receive your credit report free of charge by visiting the Experian website; requesting a copy by writing to P.O. Box 2002, Allen, TX 75013; or by calling 1-888-397-3742.
TransUnion, www.transunion.com: request a copy of your credit report by writing to P.O. Box 1000, Chester, PA 19022 or view your report online with a free trial subscription. You can also call the credit agency at 1-800-888-4213.
Equifax, www.equifax.com: write a letter of request to P.O. Box 740241, Atlanta, GA 30374 or call 1-800-685-1111 for more information. You can also view your credit report online with a free 30-day trial (3).
Knowing the dynamics of and working proactively to improve your credit score will help you boost your creditworthiness and perhaps even protect you from identity theft or credit fraud. And, if the numbers on your report are less than favorable, there are ways to improve your credit score further.
How Lenders Judge Your Ability to Re-pay a Loan
If you receive your credit report and there a few items on it that you are less than happy with, you do have some recourse in the situation. Most of all, however, do not pay someone to help you out of your mess. A credit counseling agency will offer advice on how to improve your credit score and boost your creditworthiness but will charge you extensively for this information. Basically, working to improve your credit score and fostering creditworthiness is a three step process: 1. Request and review your credit report from multiple agencies; 2. Pay in full your overdue accounts; and 3. Open new lines of credit, starting slowly with either a pre-paid or unsecured credit card.
When lenders or creditors pull up your credit report, they apply the word ‘risk’ to the situation. If someone with a low credit score is looking for a home loan, a lender will likely view this individual as high risk and perhaps deem him unable to re-pay the loan in a timely or even responsible manner. However, lenders will also consider your current income, occupation, and the amount of credit you need.
If you’re reviewing your credit report yourself, the following scale will come in handy:
Below 550 to 599: Your credit problems need to be addressed. Lenders and/or creditors consider these credit scores to be terrible.
600 to 649: Within this range, you will have trouble finding loan approvals and you may receive poor interest rates. Lenders will consider you to be high risk.
650 to 699: While close to 700 is considered healthy, as you get closer to 650, the tables begin to turn. A score of 650 is not great but is considered average. You need to think about a course of action to improve your credit score.
700 to 750: Anything between these two scores is considered financially stable and you will receive the best interest rates.
751 to 850: While 850 is the highest on the FICO scale, the high 700s are ideal and are considered the least risky for lenders. Your creditworthiness is considered quite high.
Creditworthiness Means Heightened Diligence
Poor credit can really come back to haunt you. That’s why diligence in making your payments on time and regularly checking your report to improve your credit score or maintain your creditworthiness are two of the most important things you can do to ensure you remain in balance financially.
Ultimately, your credit determines what loans you are eligible for, and if you have less than spectacular credit, you may have a hard time securing a loan for a car or a home. And if you do receive that loan, the interest rates will kill you in the long run. A little diligence goes a long way – work to improve your credit score and lenders and/or creditors will help you embark on your path to financial health and stability.
Sources
1. http://www.privacyrights.org/fs/fs6c-CreditScores.htm
2. Ibid.
3. http://www.fightidentitytheft.com/credit_bureaus.html
By: Darrel Giann
About the Author:
Creditworthiness is defined as being financially established to the point where lending credit is deemed a sound judgment by a bank or financial institution. Your credit score determines many things – if you’re responsible enough to re-pay a loan on time and not default as well as your experience handling lines of credit and interest rates. In the eyes of a financial institution, your creditworthiness will help you acquire a loan for a car, house, or other large asset much easier.
The Dynamics: Maintain and Improve Your Credit Score
Developed as a mortgage tool in the mid 1990s (1), your credit, or FICO (R), score essentially determines what, if any, loans you are eligible for and the amount of interest you’ll be required to pay. As your score decreases, the rate of interest increases. Credit companies often say that timely payments are perhaps the most important factor to foster and continually improve a credit score that is high or within an acceptable range.
Your credit score is broken down into many factors: 35% is your payment history; 30% is the current amount you owe; 15% is the time you’ve had your credit lines open and active; 10% comprises new credit lines; and the remaining 10% is the type of credit you use (2). If you’ve fallen behind on payments and the amount you owe is increasing, your creditworthiness (in the eyes of the lending institutions) may be floundering.
Send Away for Your Credit Report – for Free!
Are you interested in seeing what’s on your credit report and determine your creditworthiness for yourself? It’s easy to get this information. Simply write a letter stating that you wish to receive your credit report from the three following credit reporting agencies, and you’ll be mailed your report free of charge when requests are made once within each year. Please note that there is an additional fee to obtain your credit score from the credit reporting agencies.
Experian, www.experian.com: receive your credit report free of charge by visiting the Experian website; requesting a copy by writing to P.O. Box 2002, Allen, TX 75013; or by calling 1-888-397-3742.
TransUnion, www.transunion.com: request a copy of your credit report by writing to P.O. Box 1000, Chester, PA 19022 or view your report online with a free trial subscription. You can also call the credit agency at 1-800-888-4213.
Equifax, www.equifax.com: write a letter of request to P.O. Box 740241, Atlanta, GA 30374 or call 1-800-685-1111 for more information. You can also view your credit report online with a free 30-day trial (3).
Knowing the dynamics of and working proactively to improve your credit score will help you boost your creditworthiness and perhaps even protect you from identity theft or credit fraud. And, if the numbers on your report are less than favorable, there are ways to improve your credit score further.
How Lenders Judge Your Ability to Re-pay a Loan
If you receive your credit report and there a few items on it that you are less than happy with, you do have some recourse in the situation. Most of all, however, do not pay someone to help you out of your mess. A credit counseling agency will offer advice on how to improve your credit score and boost your creditworthiness but will charge you extensively for this information. Basically, working to improve your credit score and fostering creditworthiness is a three step process: 1. Request and review your credit report from multiple agencies; 2. Pay in full your overdue accounts; and 3. Open new lines of credit, starting slowly with either a pre-paid or unsecured credit card.
When lenders or creditors pull up your credit report, they apply the word ‘risk’ to the situation. If someone with a low credit score is looking for a home loan, a lender will likely view this individual as high risk and perhaps deem him unable to re-pay the loan in a timely or even responsible manner. However, lenders will also consider your current income, occupation, and the amount of credit you need.
If you’re reviewing your credit report yourself, the following scale will come in handy:
Below 550 to 599: Your credit problems need to be addressed. Lenders and/or creditors consider these credit scores to be terrible.
600 to 649: Within this range, you will have trouble finding loan approvals and you may receive poor interest rates. Lenders will consider you to be high risk.
650 to 699: While close to 700 is considered healthy, as you get closer to 650, the tables begin to turn. A score of 650 is not great but is considered average. You need to think about a course of action to improve your credit score.
700 to 750: Anything between these two scores is considered financially stable and you will receive the best interest rates.
751 to 850: While 850 is the highest on the FICO scale, the high 700s are ideal and are considered the least risky for lenders. Your creditworthiness is considered quite high.
Creditworthiness Means Heightened Diligence
Poor credit can really come back to haunt you. That’s why diligence in making your payments on time and regularly checking your report to improve your credit score or maintain your creditworthiness are two of the most important things you can do to ensure you remain in balance financially.
Ultimately, your credit determines what loans you are eligible for, and if you have less than spectacular credit, you may have a hard time securing a loan for a car or a home. And if you do receive that loan, the interest rates will kill you in the long run. A little diligence goes a long way – work to improve your credit score and lenders and/or creditors will help you embark on your path to financial health and stability.
Sources
1. http://www.privacyrights.org/fs/fs6c-CreditScores.htm
2. Ibid.
3. http://www.fightidentitytheft.com/credit_bureaus.html
By: Darrel Giann
About the Author:
Darrel Giann is the founder of Just14-95.com, a website that helps individuals begin a career in finance and earn extra income. Giann is also a financial consultant who has years of experience teaching people how to get ahead in life. He now works to help others achieve financial freedom. To learn more about Just $14.95, please visit www.Just14-95.com.
Alex Palk