Archive for the ‘credit worthy’ Category

5 Important Reasons Why You Should Monitor Your Credit Report and Scores Regularly

Monday, September 29th, 2014

When it comes to credit scores, many consumers try to keep their head in the sand. They’re afraid to know the truth, or they think it really doesn’t matter.

But it does matter. In this case, what you don’t know can hurt you, and knowledge can become power.

Your credit score or scores play a central role in your financial life, and can even affect your personal life. That’s why you should monitor your credit report and scores regularly, and why you should develop good credit habits to keep those scores as high as possible. A bonus to receiving your credit report is the good advice you’ll get regarding ways to raise those scores.

1. Your Scores Will Determine Your Access to credit.

Lenders look at those scores to determine their risk in lending to you. Thus, when your scores are high you’ll have an easier time obtaining credit. When they’re low, you may not be able to obtain credit at any price, especially if you need money for a business start-up.

If you know you’re going to want credit in the future, get busy raising those scores!

2. Your Credit Scores Will Determine the Interest Rate You’ll Pay

With high credit scores, you’ll be offered credit at lower interest rates than those with poor scores. When your scores are low, lenders are taking an increased risk that you’ll default. They want to be well compensated for taking that risk.

Think about credit cards, whose interest rates can vary from under 5′% to 25%. In fact, I’ve seen offers made to people with poor credit with rates over 70% – combined with an annual fee reaching upwards of $200. Borrowers with high credit scores generally pay no annual fee.

Then think about home mortgage loans, where a difference of 1% on each $100,000 owed amounts to almost $60 per month.

If you want to pay the least possible interest on your next purchase, start raising those scores!

3. High Credit Scores Make You Attractive to Landlords

Low scores make you a high risk and your rental application is apt to be flatly turned down. No landlord wants the risk of tenants who fail to pay rent – or who move out in the middle of the night.

Thus, even if you treat your housing well and have always paid your rent on time, low scores could prevent you from living in the location you prefer.

If you want to live in a prime location, get your credit scores as high as you can!

4. Poor Credit Scores Lead to Utility Deposits

Utilities such as electricity, water, gas, phone, and cable TV can’t repossess what they’ve sold you if you fail to pay at the end of the month. Thus, when your credit scores indicate that you’re a high risk, they’ll demand a deposit up front before providing you with service.

If you want utility companies to trust you, raise your credit scores!

5. Last but definitely not least – Monitoring your credit report and scores will help you avoid the huge headache of identity theft.

Identity theft is always painful, but it is MORE painful when it’s been allowed to continue for months on end.

Running regular checks on your credit scores will alert you to a sudden drop, which might indicate fraudulent activity. And when you actually read your credit report, you’ll know instantly if someone has obtained new credit, rented a house, signed up for utilities, or even gotten a new job in your name.

Reporting such theft instantly will minimize the damage and the pain.

Request your free credit report and scores from today.

Just click here

Borrow money from 401k to keep credit good.

Wednesday, August 6th, 2008

Keeping your credit report in good standing these days might be tough for some. With people loosing their jobs all over the country due to the real estate sector and energy costs, you might find yourself tapping your savings to pay bills. Most of us are taught to save at least 6 months worth of savings in case of job loss or some sort of emergency.

Once you have used up your savings account now what? If you have saved money over the years in a 401k it might be better to borrow against it and pay yourself back with interest.

If you have found yourself in financial trouble, going to the bank to get a un-secured loan can be tough and costly. If you have got credit card debt, any financial advisor will tell you to pay off your credit card debt first. The best way to pay off debt or get out of trouble is to borrow it from your 401k and pay yourself back.

Ideally you should save up 6 months worth of income in your interest bearing checking account. This checking account could be a money market, or a high yield checking account. With the market not looking attractive currently, banks are offering decent interest rates to put you money in the bank with them.

Regardless of your situation we all need to save for a rainy day. If you have a 401k or a savings account, it usually better to borrow from yourself than a bank charging high interest.

When that rainy day comes you will have the money to keep your credit score in good standing.

“Remember your credit is your life”

Credit Score Requirements for 2008 Mortgages

Wednesday, March 12th, 2008
Your credit score in 2008 is very important when it comes to buying a house. Heck your credit score is important when it comes to getting a loan period these days. Since the sub-prime mortgage meltdown, Wall Street has tightened up on what kinds of mortgage paper they will buy. Most loans are run through automated underwriting engines. The underwriting engine will either say yes or no, but here is the funny thing. Even though the engine says yes, the investor may have its own internal guidelines that would overrule an automated approval. This is not normal in the loan business. During the past years when you got an automated approval with either Freddie Mac or Fannie Mae underwriting engines you were golden.

Mortgage Insurance Companies
Since all the tightening up in the lending industry, the companies that insure these loans have tightened up as well. The reason for this is all the claims that are being filed as a result of defaults on mortgage loans. I have discussed in other articles how everything basically is based on risk, well so is insurance. If the insurance company sees a pattern with certain credit scores and loan types they will tighten up on the underwriting guidelines for those specific borrowers. Currently you cannot get a 100% Conventional prime loan unless you have a 680 credit score. Previously it was below 600 credit scores, but you had a higher interest rate. Currently they will just deny you of the loan, because they cannot get the loan insured. This mortgage crisis will affect everyone, including people with good credit. They will be able to get loans, but the loan guidelines will be more stringent.

FHA loans
FHA loans have been around since 1935. This government entity is the single largest insurer of loans in the world. FHA has baled the housing industry out of the tar pit right after the great depression. It looks like the same savior will be at it again in 2008. FHA loans have not tightened up, but again the investors that buy this paper have. Its common for banks to sell there loans to other banks. This is just a common practice these days. The only problem is the big banks buying paper from the small banks have really tightened up on what type of loans they will buy. With this being said, the entire process is getting tough all around.

Credit Scores
Your credit scores will either make you or break you when it comes to getting credit extended to you. With the disaster in the housing market, you can count on it getting even tougher with credit score requirements. So if you are in the market to get a home, I would recommend getting a copy of your free credit score report and see where your scores stand. Your score will be extremely important in this current lending market.

About the Author: Mike Clover is the owner of is the one of the most unique on-line resources for free credit score report, fico score, Internet identity theft software, secure credit cards, and a BlOG with a wealth of personal credit information. The information within this website is written by professionals that know about credit, and what determines ones credit worthiness.

How to read a Credit Report

Monday, January 28th, 2008

Have you thought about getting a copy of your Credit Report? Years ago there were complaints that credit reports were hard to read for the consumer. In past years Equifax, Experian and Trans Union had changed the format of the reports to make them more readable and understandable. Each of the 3 Credit Reporting Agencies or ( CRAs) have ways of referencing a credit report with them.

For Instance:
Equifax – Confirmation number
Experian – Report Number
Trans Union – File Number

These particular reference numbers will be asked if you are disputing any of these credit bureaus.

To make matters more difficult, “Credit Report” is not the official term. The Fair Credit Reporting Act calls the credit report for consumers “Consumer Report.” The industry refers to the report that creditors sell as “credit report.” Nether less either one has the same purpose. They give an account of your personal credit history with creditors.
Here is an example of what you need to identity you with all 3 Bureaus.

First Name:_______ Middle Name:________ Last Name:_______

Birth date:_______ Social Security Number:________

Current Address: Typically two year residence history

Current Employer: ________

Here is what to expect to see on your credit report.

1. Your identifying information listed above:
2. Your Payment history, including auto payments, credit card payments, installment loans, and mortgage history.
3. Public Records: bankruptcies, tax or other liens, and judgments.
4. Inquires showing which companies accessed your credit report for different purposes.

Identity Information

This information is very important, and needs to be accurate. The CRAs use your personal information to determine which report to route your information. If you input the wrong information when getting your credit report, it can lead a report that results in mixed files, and other inaccuracies. This definitely pertains to inputting the correct social security numbers. Maybe you are a JR, and your information is getting mixed with your father or son. Believe it or not this is a common problem with credit reports. You may have to dispute this information with the CRA that is reporting incorrectly.

Credit History

A bankruptcy can remain on your credit report for 10 years; other negative information typically is on there for 7 years unless you can get the creditor to give you a letter to delete a negative item from the CRAs. A tax lien that is not paid can stay on your report for ever. Once you pay it, from the paid date it stays on your report for 7 years. Here are terms and there meaning as they are listed on your report.

 Public Records: Bankruptcies, court and default judgments, liens, and foreclosures
 Late Payments: Typically falls into one of the four categories, 30 day late, 60 day late, 90 day late, and 120 day late.
 Charge Offs: Accounts that are in default of original contract and terms. Charge off is a book keeping term which means the creditor reports obligations as a loss.
 Collections: A account that is so delinquent that the obligation is turned over to a collection company for collection.

Typically after all the bad is listed, the report will list all the accounts in good standing. Experian and Trans Union reports “never late”, and Equifax reports as “pays as agreed.”
You will want to always make sure all information is accurate.


Any time someone checks your credit for loan, credit card, installment loan or a mortgage you will have on of two types of inquiries: “hard” and “soft.” Soft inquiries don’t drop your credit score, but too many hard inquiries you could drop your score.

Account History Status Codes

Equifax report will list codes showing how you are classified when you do not pay your bills on time. Also a credit report will show types of credit, “I” for installment loan, “R” for revolving and “M” for mortgage. Here are numeric codes as well.

1: On Time
2: 30-59 Days Past Due
3: 60-89 Days Past Due
4: 90-119 Days Past Due
5: Over 120 Days Past Due
7: Included in Wage Earner Plan
8: Repossession
9: Charge Off
Blank: No Data Available for that month
0: Unrated

Description of Accounts

 Date Account Closed
 Date Account Opened
 Company Name – The Creditor
 Account Number
 High Credit
 Credit Limit
 Terms of payments 360 months or 30 yrs
 Number of months reviewed
 Date Reported
 Balance
 Past Due Date
 Activity
 Date of Last Activity
 Charge Off Amount
 Deferred Payment Date

About the Author: Mike Clover is the owner of is the one of the most unique on-line resources for free credit score report, Internet identity theft software, secure credit cards, and a BlOG with a wealth of personal credit information. The information within this website is written by professionals that know about credit, and what determines ones credit worthiness.

What’s My Credit Score?

Thursday, November 29th, 2007

If you’re applying for a loan or credit card, your credit score could have an impact on your interest rate and loan term. So what is your credit score and what does it mean? What does it say about you? Credit scoring is how creditors or lenders assess their risk when lending money to you. They look at your score and it indicates to them how financially responsible you have been in the past.

Your credit worthiness is calculated by credit scoring agencies and bureaus. You should get a copy of your credit score at least once a year and make sure that there are no mistakes or omissions in it. You can get this information for very little money and sometimes for free. Your actual score will be between 300 and 900. Higher scores are much better and can get you great interest rates, longer pay-off periods or terms, lower fees and less paperwork in the application process. Low scoring applicants are usually rejected all together or they are offered high interest rates, high minimum payments and more fees. Sometimes low scoring applicants are accepted based on their employment history or other factors, but generally aren’t as trustworthy as their higher scoring counterparts.

Is your score a good score? 650 or higher is a very good score and will generally earn you the very best terms when applying for loans. If there are a few minor problems with your credit history, such as a couple of late payments in the last few years, then you can score between 620 and 650, which is still a good score. You may run into a few problems with this score, but generally it is still pretty good. You’ll probably end up with slightly higher interest rates than people with excellent credit. Scoring under 620 puts you into a risky category. You may still be approved for a loan, but it will be at the highest interest rates and you may be considered a big risk to lenders.

Things that affect your credit score include your borrowed money payment history, late payments and missed payments. Late and missed payments on a credit card or loan are very big considerations when calculating your credit score. You should try to never make a late payment because it blemishes your record for years. Another thing considered when figuring your credit score is your debt to income ratio. If your level of debt is very high relative to your income, or if the cards you have are close to their spending limits, then your score will probably go down.

If your credit history is very long and you’ve had revolving credit for years, then your score may drop. Trouble paying things off completely makes you look like you are in over your head, or you’re just not trying to pay off your debts. Inquiries on your credit are another thing that is looked at. If you’re constantly applying for credit cards and loans, regardless of your acceptance or use of the instrument, then you look like someone who can’t afford the things that you’re trying desperately to get. Do your research before choosing a loan or credit card to apply for. Multiple inquiries on your credit can hurt you in the long run. Your credit score ultimately depends on you.

Author: Mike Clover

Disclaimer: This information has been compiled and provided by as an informational service to the public. While our goal is to provide information that will help consumers to manage their credit and debt, this information should not be considered legal advice. Such advice must be specific to the various circumstances of each person's situation, and the general information provided on these pages should not be used as a substitute for the advice of competent legal counsel.