Maximizing Credit Scores

Borrowing money today requires impressing an increasingly hard-to-please crowd. With creditors of all kinds more cautious than ever, you need an A+ application to land the best terms — and that means an A+ credit score, the number lenders use to judge your risk of default.  If your credit get hits you could be forced to take out a bad credit mortgage that carries a much higher interest rate.  Jason Cardiff businesses have always operted more effectively by leveraging with credit.

The most commonly used credit scoring system, called FICO, rates people from a very risky 300 to a pristine 850. And right now we’re in the middle of a credit score crunch: “You need a 750 or better today to have the same treatment you got with a 700 two years ago,” says John Ulzheimer, president of consumer education at Credit.com.

Know Your Credit Score. You have three FICO scores, based on your credit reports at the three credit bureaus: Experian, Equifax, and TransUnion. The numbers tend to be in the same ballpark, so pony up $16 to get one representative score at myfico.com. You can get an estimate free at Creditkarma.com. But the FICO score gives you a better sense of what lenders see. 

Look for Mistakes. Your scores are only as good as the information they’re based on. And a third of people who’ve pulled their reports have found errors, according to a Zogby poll. That’s good reason to read your report.

When you buy your FICO score, you’ll get a copy of the report it was based on. Get gratis histories from the other bureaus via annualcreditreport.com (you’re entitled to one free from each bureau every 12 months).

Spot an error? Request a correction, following the instructions on the bureau’s website. Let’s say the size of a credit line was misstated or an account was mistakenly marked delinquent. Getting the error fixed could raise your score as much as 200 points, says Ulzheimer, who has also worked for Equifax and FICO.

Never, Ever Be Late. As you’ll see in the pie chart on the right, the biggest chunk of your credit score comes from your payment history. Just one late payment can shave 100 points off a 750-plus credit score, says Ulzheimer. Lenders can’t tattle on you to the bureaus until you’re 30 days past due, adds credit expert Gerri Detweiler. But don’t risk it. For all your bills, enter recurring

Missed a payment? Get back on track within the next 30 days, and you should “get back the lion’s share” of points lost, Ulzheimer says. More than 90 days late? The damage can stick for years. If it was a one-off lapse, call your issuer and plea for a good-will adjustment to your credit report. (It’s a long shot.)

Along the same lines, 10% is based on “new credit,” but the effects of a new application can be positive or negative, depending on your history. Read the original article online.>  Keeping Credit Scores High

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Does Credit Report Study by FICO Consider the High Cost Regions?

The father company that created credit scores, FICO released new results of a credit line study measuring the breadth of credit card limit reductions as well as the subsequent impact to consumer’s FICO credit scores. The study is the first of its kind since credit card issuers began to heavily ramp up their credit limit reduction activity in early 2008. Let’s consider some note-worthy points of the credit report study by FICO: 16% of the U.S population had their overall available revolving credit reduced between April and October of 2008. With credit bureau databases holding 200+ million consumer credit files, this would seem to indicate that at least 32 million cardholders lost some of their credit limits during the study timeframe of April 2008 through October 2008.

Bad credit mortgage options remained non-existent for struggling homeowners seeking home refinancing with fixed rates and lower loan payments.  Millions of homeowners have been turned down by mortgage lenders across the country, because of low credit scores, delinquent mortgages, negative equity or employment instability.  Some homeowners may qualify for loan modification plans if they happen to have their mortgage collateralized by Fannie Mae and Freddie Mac.  However, only conforming home mortgages qualify for the federal mortgage modification program.  Jumbo home loans do not qualify for a federal or FHA mortgage that ensures foreclosure prevention through a loan workout or mortgage refinance loan.

According to FICO, “Credit utilization rate has proven to be extremely predictive of future repayment risk, so it is often an important factor in a consumer’s credit score.  Credit holding companies started taking a pro-active approach to borrowers who access a significant proportion of their credit available because they are much more likely to default on their credit card terms with debt settlement, credit counseling or bankruptcy. However people maintaining lower credit utilization levels whose credit cards and home equity lines of credit are not maxed out are much more likely to continue making their credit debt payments as agreed.

5 % of the population, or 10 million consumers, saw their limits reduced because of some sort of risky credit activity including late payments, accounts in collections, or a negative public record added on their credit reports. The credit score decrease is likely due in part to an increased credit utilization percentage, while the score increase is likely due to the reduction of credit card balances. News reports also indicated that the home loan defaults and credit card debt negotiations have caused the credit repair industry to explode.

Read the complete credit report article > Thousands of Credit Card Consumers Report Credit Line Reductions in 2008.

Wave Good Bye to Credit Card Debt

Credit card debt continues to plague our nation. When it considering credit card debt statistics, you can choose to remain on the growing list of compounding interest or you can make some changes that offer new freedom to you and your family.

Read the debt relief article listed below and you will find yourself on the path to becoming debt-free.  Stop paying interest to the finance companies that hold your credit cards and pay off your debts and you can start saving for the future. Read the Debt Relief for Credit Card debt Article >

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Investing vs Paying Credit Card Debt

If you carry a balance on one or more credit cards, you’re not alone: According to the Federal Reserve, nearly half of American families do.  Compounding interest of revolving credit cards is one of the quickest ways to kill the momentum of savings.

And nearly half of American families also have some sort of bank savings accounts. If you have savings, should you use that money to pay off your credit cards?

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