| Credit Score Secrets (credit counseling)
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Credit Score Secrets
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A checklist for credit counseling
Signs of a Reliable Credit Counseling Agency
__Better Business Bureau Membership
The service's website should have a BBB logo and a link to their record on the Better Business Bureau website. Click through the link to check that there are no unresolved complaints against them. Many people only think about the Better Business Bureau after they've been cheated, but by then ther... Read credit counseling article
Consumer Credit Counseling
What Is Consumer Credit Counseling?
Consumer Credit Counseling is a program that has been around for nearly 60 years and helps educate people how to pay debts and better manage their money in the future. This program can provide a great deal of insight and aid in helping to resolve credit problems and lower interest rates.
What Are The Advantages and Disadvantages Of Using Consume... Read credit counseling article
Credit Score Secrets
Any credit you have will be part of your credit report. This includes credit cards, car loans, mortgages and student loans, etc. The credit bureaus or any prospective creditor may use this information to generate a credit score. How credit scores are calculated is not a secret at all.
Credit Score Explained
A credit score statistically compares information about you to the credit performance of a base sample of people with similar profiles. The higher your credit score, the more likely you are to be a good credit prospect. The less risky you are, the better your chances of obtaining credit at a lower interest rate.
When a potential creditor looks at your credit report, they are looking at a report from at least one of the major credit bureaus: TransUnion, Equifax and Experian. These companies collect account and payment information on you from your creditors. Creditors may report information to just one, two or all three credit bureaus.
It's important to know what is in your credit report on each of the three bureaus because since some lenders report to particular credit bureaus, you may even have different credit scores at each of the three. Moreover, lenders do not consult all three bureaus either. Thus, you may be declined for a loan by lenders that request information from certain bureaus and you might be approved by others.
Credit Score Components
A number of factors are used by potential lenders to determine your credit score. Some factors have more influence than others. The most important factors in terms of influence on your credit score result are those who have to do with payment behavior, credit behavior and debt situation.
Payment history: Many of your debt payments are recorded in your credit history, your bill payments, loan payments, credit card payments, store card payments, etc, are all included. Also, if you had delinquencies like late payments or missed payments, the amount of time it took you to correct this situation will also be reflected on your credit score.
Outstanding debt: This includes the amounts you owe on your accounts, the different types of accounts you have and how close your balances are to the account limits. Overdraft agreements, credit card balances, store card balances, lines of credit, etc. are included within this category.
New credit: This is an important factor that includes how many applications for credit you've made and how recently you've made them.
Credit history: Lender also look at how long you've had credit, how long accounts have been open, and how long it has been since you've used each account.
An excellent way to improve your credit score is to pay all of your bills on time, every time! It's the cheapest, fastest and most efficient weapon against bad credit!
Sarah Dinkins is an Expert Loan Consultant at Badcreditfinancialexperts.com where she helps people to repair their credit and to get approved for home loans, unsecured personal loans, student loans, consolidation loans, car loans and other types of loans and financial products.
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Improving Credit Score
The credit score was invented about 40 years ago by Fair Isaac Corporation. A FICO reference on your credit report alludes to that score. It is considered the standard in the financial services industry and is used by all three of the major credit bureaus. FICO scores consider a wide range of information on your credit report, primarily your credit history, your payment history, the number of credit accounts you have and how much you owe.
Personal and Sensitive Information
However, Personal information is not considered or included in your credit score. You can rest assured that sensitive information is protected by law and that by no means is included within your credit score calculation or your credit report for that matter. Data that is not considered includes many personal information protected by several statutes.
Race, religion, national origin, sexual orientation or marital status is not part of the credit score formula. It is against the law in the United States to consider any of this information in credit scoring. Including information on receipts of public assistance, or the exercise of any consumer right under the Consumer Credit Protection Act is also illegal.
Your age is not considered in a FICO score nor is your salary, occupation, job title, employer, and employment date or employment history. Although lenders consider this information, it is not included in your credit score where you personal life is not an issue. Some of this information may be included however in your credit report but will not be used to calculate your credit score.
Financial Information Left Aside
The interest rate being charged on a particular credit card or account or Child/family support obligations or rental agreements won't be included in your credit score either. All this information can be requested by a lender when you apply for a loan of a significant amount but won't be part of your credit score as only basic items are components of the credit score formula.
Requests for your credit report are not considered. The score does not count requests you have made for your credit report to check it for errors. It also does not count requests made by lenders to make you a pre-approved credit offer. Any request by a lender for you to review your account with them, called an administrative inquiry, is not included. Requests coming from employers are not counted either.
Basically, any information not found in your credit report will not be considered in your credit score and only certain information from your credit report will be used as variables of the credit score formula (mainly the ones enunciated at the beginning of this article). Also, a popular fallacy is that participating in credit counseling affects your credit score.
Mary Wise, a professional consultant with twenty years in the financial field, helps people in the process of securing personal loans, mortgage, refinance or consolidation loans and preventing consumers from falling into the hands of fraudulent lenders.
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