What’s a Good Credit Score – Analysing What’s a Good Credit Score

Posted July 30th, 2011 by Steve with No Comments

What’s a good credit score?

Most people ask this question before renting a new house or before applying for a loan. Credit scores are not arbitrary numbers and building a good credit score is not a matter of a few days work. There are a number of factors which have taken into consideration when evaluating your credit score.

What’s A Good Credit Score – How are Credit Scores Determined?

Listed below are the chief factors considered when assigning a credit score and what qualifies as a good credit score.

  • History Of Payment – It is your payment history that makes up more than one third of your credit score. A few late payments on your credit card would not do much harm to your credit score. However, more than a few can land you in hot water. When you consistently pay your dues and bills late, you are considered to be a slow pay or a habitual late.
  • Outstanding balances – Nearly 30 percent of your credit score is made up by outstanding credit balances. It is recommended therefore that when you near the upper limit of your credit, pay immediately. Even in the case of a financial or medical emergency, pay your dues as soon as possible because being close to your credit limits destroys your credit records irrevocably.
  • Duration of Use of The Credit Accounts – The amount of time for which you have used your credit accounts determines nearly 15 percent of your overall score. In some cases people with credit accounts find it easier to get loans than people who have not used credit accounts at all. Note however, that those who have used credit accounts in the past have to pay a high amount of interest.
  • Application For Additional Credit – When you apply for extra credit within a short period of time, it gives most lenders and creditors a bad impression.
  • Types of Credit – Having a healthy mix of credit types can impact your credit score positively. For instance an installment loan, credit cards and a mortgage is a good mix. However, too many modes of credit can do more harm to your credit score than good, for instance too many credit cards which have been maxed out.

Usually, 700 and above is considered to be an excellent credit score. Most lenders will have no problem with people who have such scores. Anywhere between 600 and 630 is just average, while 500 and below may be considered bad.  Once you know the range that you’re targeting, you can easily determine what’s a good credit score for yourself.

How to Check Credit Scores Online – A Step By Step Guide

Posted July 29th, 2011 by Steve with No Comments

Checking credit scores online has become a common practice for most people who are worried about their financial well being. Even for people with good credit scores, checking credit scores online is a recommended practice in order to avoid nasty surprises when buying new property or belongings by taking a loan.

Some Numbers

Statistics on credit card report errors are rife. A United States Public Interest Research Group study in 2004 indicated that nearly 79% of credit card reports contained errors. A similar study by the same group in the year 2006 claimed that nearly 27% of adults do not check their credit scores online or carefully review their credit reports for errors.

If you wish to improve your financial health, you need to get your financial report and review it carefully for errors and inconsistencies. Listed below are a few steps for your benefit – follow these steps to get your annual credit report for free.

AnnualCreditReport.com – This site is government approved and allows you to gain complete access to your credit report in a matter of minutes. Once every year, you are entitled by law to receive a free copy of your report from the three major credit bureaus. However, using this site gives you easier access and allows you to choose the assessment agency from which you want your credit scores. For instance, if you want the credit report from Equifax only, you can do this by clicking the check box on the website.

Step 1: Visit AnnualCreditReport.com and when you are on the homepage, select your state from the dropdown menu. Next to this dropdown menu is a red button that says request report. Click the button once you have selected your state.

Step2: Once you have clicked the request report button, a screen requesting your personal information will be seen. You need to enter the right information here and correctly fill in the fields marked with the red stars. If you are printing this report, you do not need to have your social security number displayed. A check box will be available on the screen which gives you that option. This will ensure that only the last four digits of your social security number are displayed. Once you have entered your social security number, click on continue.

Step 3: On this page, you will find checkboxes with the names of three different credit bureaus- Equifax, Experian and Transunion. Select the bureau or the bureaus from which you wish to receive your credit reports.

However, bear in mind that you cannot access your credit report up to a period of 12 months from then. You can check one report every four months in order to keep tabs on your score every four months. Once you have clicked next and received your report you can navigate back to the home page by clicking home.

Keep these steps in mind while accessing your annual credit scores online and studying your credit report.

Free Credit Card Information – Credit Score maitainence with Free Credit Card Information

Posted July 28th, 2011 by Steve with No Comments

Learning about free credit card information and methods by which you can improve your credit score substantially is highly important because bad credit scores can make your life all the more difficult financially. If you have had problems paying your bills and want to repair the damage done to your credit score, listed below are a few simple, actionable steps you can take.

  • Getting a Credit Card – If you do not have a credit card get one immediately. You need not carry balance in order to have a great score, however, using one or two credit cards can greatly improve your credit score. If your credit is really bad, you can go for a secured credit card. A secured credit card  is issued by banks which allow a credit line equivalent to the deposit you make.
  • Using Your Old Cards – Use your older cards from time to time. The older your card, the better will be your credit, however, if you stop using your oldest cards, the issuers of these cards may close the accounts or stop sending updates to the assessment bureaus. Although the older accounts may appear in your credit reports, they will not be given as much value as the credit accounts/cards you regularly use. Therefore use these cards for light recurring expenses, but also ensure that you pay these bills away in full.
  • Availing Goodwill Adjustments – You can make a request for a goodwill adjustment to improve your credit score. For instance, if you have made a late payment and if you have been a good customer to your lender so far, your lender might just agree to erase one of your late payments as a show of goodwill. Goodwill adjustment requests are generally issued to the lender by the account holder in writing.
  • Assessing Your Credit Reports – Assess your credit reports and read the credit statements for your cards very carefully from all three assessment bureaus. Often, there are errors where one assessment bureau does not erase records for an unpaid debt despite the individual having made the payment in full. Check for such errors and send a copy of any documentation that proves that you have made a payment.

Plenty of free credit card information and credit score information is available on the internet today. You can use this to keep yourself abreast of what’s happening.

Poor Credit Score – How To Beat Poor Credit Score

Posted July 27th, 2011 by Steve with No Comments

Take every precaution to avoid a poor credit score even if it may seem like nothing more than an ordinary three digit number. A good credit score can get you the very best interest rates when you decide to take a loan and a poor credit score however can be detrimental to your financial health in more than one way. Listed below are some of the ill effects of a poor credit score.

  • Difficulty Landing A Job – Certain jobs require you to have a good credit history. This is especially true if you are looking for a job in the finance sector. While most companies today are extremely particular about credit history and credit scores, you can apply for a job where they do not check your credit history before employing you. While this is not the best fix for a poor credit score, it might get you through a rough patch while you take the time to improve your credit rating.
  • Greater Insurance Premiums- All insurance companies check credit. Studies in the field have shown that lower credit scores are invariably linked to a higher number of claims filed by low credit applicants. So this means that the low credit score applicant is more likely to file a claim as compared to an applicant who is financially sound and pays bills on time.

Owing to this theory, the insurance company will check your credit. If your credit is low, they will charge you a higher premium as a guarantee for the risk they are taking. This will be regardless of the number of claims you have actually filed previously.

  • Debt Collection Calls – In case you have past due bills, debt collectors calls will be a constant menace in your life.
  • Owning a Business Becomes Hard – If you intend to start your own business, it might become very difficult to first procure a loan from a bank or a financial institution. A poor credit score can affect the borrowing limit even if you have a solid business model and convincing information to back your idea.
  • Difficulty Buying a Car – Buying a Car or any other vehicle becomes equally difficult owing to  a poor credit history. A bank will check your credit before they sanction a car loan. While most financial institutions will deny you a car loan, others which are willing to give you a loan will do so at a high rate of interest. Places that claim ‘No Credit Checks’ charge very high rates of interest. This may make your monthly payments for your car difficult.

A poor credit score can also affect other areas of your life. Landlords check credit before leasing out a house; utility companies check credit before you enlist that utility to your name and most financial institutions check credit before sanctioning a loan. Researching on ways to improve and maintain your credit score should be a regular task in your to-do list.

Bad Credit Score – What Happens When You Have A Bad Credit Score?

Posted July 26th, 2011 by Steve with No Comments

Maxing out your credit cards and ignoring your bills can give you a bad credit score in the long run. Payments through credit cards and debts that have been unpaid for a long time can have the most detrimental effects on your credit score among other consequential factors.

While the ill effects of a bad credit score might not be evident to you now, it will occur to you that most financial institutions and organizations consider your credit score before interacting with you. Listed below are some of the consequences of a bad credit score.

  • Higher Rates Of Interest – Most creditors and lenders will see your application as a risk in comparison to other applicants who have better credit as compared to you. In order to compensate for this risk, they will make you pay a rate of interest much higher than the others. In the long run, you will end up paying a greater amount for the loan as interest.
  • Rejection Of Loan Applications – Most of your loan or credit applications will be denied because most creditors will view your application as a risk. While some creditors will lend you money at higher rates of interest, some creditors might not lend you the money at all.
  • Difficulty Getting An Apartment – Before you enter into a deal with a landlord, he will check your credit. If you have a bad credit score, he will not want to entertain your application. Even if a landlord agrees to take a risk and leases out an apartment to you, you might have to pay a higher deposit or a greater amount of rent or both.
  • Paying Heavy Deposits On Utilities – Cable companies, phone companies and electric companies check your credit when you send them an application for owning a utility. If you have a bad credit score or a bad credit history, you end up paying a security deposit to have a service in your name. Irrespective of whether you have paid your bills on time, a bad credit score can establish your application as a risk to the assessment official and make it difficult for you to use a utility.
  • Difficulty Getting Cell Phone Contracts – Cell phone companies also check your credit history. When you first apply for a cell phone you will get a grace period of one month in which the cell phone companies will determine how reliable your payment behavior has been. If you have a bad credit history, you may have to do without a cell phone or get a prepaid cell phone.

You cannot repair a bad credit score overnight. You can however slowly improve your score by committing to a change in your borrowing habits over time.

Good Credit Score – The Prerequisites of a Good Credit Score

Posted July 25th, 2011 by Steve with No Comments

Building a good credit score may seem quite difficult at first glance – but provided you know the right techniques, you can successfully do it. There are a few prerequisites involved in building a good credit score such as following market discipline and going through with debt repayment procedures.

In addition to this, you need to be very patient. By keeping a few general guidelines and making timely repayments, you can be sure of building credit. Listed below are a few pointers with information that will help you to understand the prerequisites of building a good credit score.

  • Your credit score begins to accumulate when you start using your credit card in places like shopping malls and departmental stores. At this point, you are given the lowest scores. In due time as you keep using your credit card, you secure higher scores on purchase of clothing and other products of necessity.
  • Pay your bills in a timely manner. You need to pay your bills as soon as you receive them. You should do this in order to assure lenders that you are in a position to repay borrowed money and are financially fit for a high value loan.
  • Credit scores can be built until there is outstanding credit balance in your account. It is recommended however that you pay your bills in time to avoid the payment of penalty interest on outstanding dues. There is no guarantee as such that the timely payment of bills will definitely build credit but it reflects well in your credit report and also you do not want to pay interest on outstanding dues.
  • Lenders and credit companies often assess your credit history at a point in time, three or four months after you receive your credit card. It is recommended therefore that you carry credit balance in your account for some time in order to build solid scores.

Remember to monitor your credit reports on a regular basis and also keep your old accounts open. These steps will help ensure that you have a better-than-average or good credit score.

Know Your Credit Rating – Can You Get a Free Credit Score Rating Online

Posted July 24th, 2011 by Steve with No Comments

Getting a free credit score rating online today is a fairly simple task. There are websites which give you access to your credit score report and are a very useful tool to avoid unpleasant surprises, especially when you have applied for a loan or are mortgaging your property.

Difference Between Credit Score and Credit Report

A credit score is a numerical value. It is calculated based on the information from your past credit transactions. Usually, landlords, credit companies, banks and other financial institutions make use of this number. Banks and creditors use this number in order to assess the credit risk involved in processing a loan for you. In other words, they are basically assessing your capability of repayment of the loan that they have given you or will be giving you.

Most credit reporting companies use complex mathematical formulae in order to take factors such as payment history, the amounts owed, the duration for which the amount was owed and types of credit among other factors into account.

A credit report however, is a report or a summary of how financially reliable you are. For the most part, this report specifies your previous records of payment of bills and other debts. Credit bureaus or credit reporting agencies such as Transunion, Equifax and Experian usually assess information from institutions like banks and credit card companies and eventually make this information available to third parties. Third parties usually include money lenders and employers.

Which Websites Offer Free Credit Score Rating Online?

Many websites offer credit reports for free and credit scores for a nominal fee. You need to find websites that offer free credit score ratings for free and a little bit of research can help you in this regard.

In some websites, in exchange for obtaining your free credit score rating, you will need to fill up a form and the website will give you access thereafter. Ecompare, Getfreecreditreportnow.net and Experian are other websites that offer free credit scores online.

Free Credit Score Online – A Simple Guide

Posted July 23rd, 2011 by Steve with No Comments

What is my credit score?’ should ideally be the only question that should matter to most consumers today, considering the fact that the Governments & Banks have finalized rules to provide credit scores to certain companies.

According to some new rules in the world of credit, banks and other companies are required to disclose their credit score requirements to consumers when they are setting credit terms. This is an effort to let the consumers know how they will be judged by creditors and lenders.

Lenders constantly review the credit reports of those who have applied for loans in order to determine the credit worthiness of the applicant. A lower credit score and likewise bad reviews on the credit report can mean paying higher rates of interest on the loan or the mortgage.

Free Credit Score – How to Get Your Credit Score Online

You can acquire your credit score online for free annually on the website www.annualcreditreport.com. However, there are rules for obtaining your credit score. You can only access your credit reports from the three different assessment bodies only once. If you have been denied credit for 60 days, you are eligible to obtain copies of your credit report for free under the fair credit reporting act. It is essential that you go through the copies of all three credit reporting agencies reports very carefully.

Free Credit Score – How to Analyze Your Free Credit Score

It is essential first to understand how a credit score analysis works. Landlords, telephone companies and other credit related companies look for credit scores above or close to a designated three digit number. This number is the norm for a particular year. Therefore, it is essential that your score stays above this number or at least close to it.

Usually, a credit score close to 700 or above is considered to be good and a credit score lower than 500 is considered to be a poor credit score.

If you have a low or a less than average credit score, it can be very difficult for you to get a loan. It is recommended therefore that you take measures in order to repair your credit score. If you wish, you can also take the help of a qualified professional in the field.

The Benefits of Improving Credit Scores – The Sunny Side

Posted July 22nd, 2011 by Steve with No Comments

Improving credit scores is one of the most important factors for maintaining your financial well being. People are often not concerned about improving credit statuses in case they are not applying for a loan or a mortgage in the near future.

Those who appreciate the importance of a good credit score however, understand the value of being consistent with their payments and adopting the best practices for a healthy credit score. Listed below are a few of the benefits of improving credit.

Improving Credit – Who Considers Credit Scores          

Granting loans and mortgages are not the only occasions when credit scores are considered. Utility companies, credit card companies, insurance agencies, employers, landlords and phone companies also value a healthy credit score. With a low credit, doing something as simple as getting a job or a loan by yourself can get very difficult. If you do not meet the prerequisites for an average or a good credit score, it is recommended that you take the time to repair your credit.

Improving Credit – Disadvantages of Low Credit Scores

Listed below are some of the disadvantages of low credit scores:

  • Higher rates of interest
  • Refusal to get additional credit
  • Payment of higher deposits on utilities
  • Rates of Insurance will be much higher
  • Rejection for renting accommodations
  • Rejection at interviews from prospective employers
  • Difficulty when renting vehicles or making reservations

Improving Credit Scores – The Knowhow

If you decide to improve credit scores, you will have to do the following:

  • When you gain access to your credit reports from the three different credit bodies in your state, reading them carefully will let you assess if there are any discrepancies which are causing your credit harm. These discrepancies could include wrong names, amounts or any other detail which has been entered erroneously. If you have made a payment already, there could be a possibility that it has not registered with one of the audit bodies. It is recommended therefore that you send a letter of proof to that particular body informing them that you have made the payment. This will stop harming your credit score and your overall credit worthiness.
  • If you have declared bankruptcy recently, you can get in touch with your creditor in order to discuss a payment plan in order to pay him back.

You can get a loan sanctioned for a more worthwhile venture if you go about improving your credit. With bad credit scores, you might find it hard to even get a job. Maintaining your credit score and improving it constantly will help ensure that you live a stress free life while the money you earn little by little earns you financial redemption for your mistakes.

Riding the Tide – How to Protect Credit Ratings

Posted July 21st, 2011 by Steve with No Comments

Working people find it particularly hard to protect credit ratings owing to the barrage of expenses in their day to day lives. The ideal credit score can be elusive if you have suffered one financial misfortune after another.

This is especially true considering the world is slowly pulling itself up from a period of economic recession in the past few years. Your credit rating can affect not just your ability to get credit and the interest rates that you pay, but also the premiums you pay on your insurance and your ability to land a job. If you have declared bankruptcy recently here are a few steps you can take in order to protect your credit.

Protect Credit Ratings – Things You Can Do

    • Fix Errors In Your Credit Report – While reading your credit report it is essential that you stay on the lookout for any kind of discrepancies and inaccuracies in order to protect credit ratings. Do not get penalized or pay for mistakes in your credit report. Numerous credit reports have discrepancies; there is a good chance that yours could have a few. You can receive a copy of your credit report once every year or one credit report every four months depending on the state you live in. To know about the rules that apply to obtaining a credit report in your state, you can log on to www.annualcreditreport.com. Once you get your report from the three audit bodies read through them carefully. Find out if the payments that you have already made and are still being reflected in your credit report is affecting your credit rating.

Find out if your bank gives you the option of owning secured credit cards. These types of cards require you to pay an amount equivalent to the credit limit in a savings account from which the bank may collect any missed payments. However, getting a secured credit card may be difficult in some cases considering you might need a co-signee. You can get the help of your friends or family in this regard, in order to protect credit.

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