Archive for November, 2007

A Good Credit Score is Within Your Reach

Thursday, November 29th, 2007

What does your credit score include? When you are establishing your credit, you may wonder what the credit agencies are actually looking for. Generally, they start out with your name, social security number, employers, current and past addresses, and your marital status. When someone gets your credit report, it includes things like when you make payments to your utility bills. Paying a bill late can stay on your credit history for years. Things that you might not imagine would affect your score can be heavily weighted when determining how high of a risk you are. They look at whether you own or rent, how long you have lived at the same address, what your occupation is and how many years you have you been at your current job.

Good credit gives lenders the idea that you are a low-risk person who manages their credit and finances wisely. When you establish a good credit history, you will enjoy lower interest rates, lower minimum payments, less paperwork and more lending options. Poor decisions can lead to years of paying higher minimums and higher interest, forcing you to hold your balances for longer and longer. You can be denied jobs, car loans, and pay auto insurance rates over 200% higher than someone with a high rating. Those who manage their credit well enjoy lower limits, more freedom of which instruments they choose and can pay off balances more quickly. In general, having good credit saves you money and can get you the kind of help that you need when you need it.

Lenders look at your financial situation as well when determining your credit worthiness. They will see how many credit cards and loans you have, if you have made any late payments and how many years have you had a credit history. Eight or more years of credit history is preferred, so get started as early in your life as possible. Don’t let your debt add up to over 15% of your income. It’s a good idea not to let your balance get up to 50% of your available credit on credit cards.

Keep the number of inquiries on your credit low. You should take a look at your own credit report once a year to make sure there are not any mistakes on it. One inquiry does not hurt you, but multiple inquiries can significantly impact your score. Even two inquiries can lower your score by around eight points.

Building good credit takes time, effort and maybe some sacrifices. Start early building your net worth. Having a checking and a savings account earns you a score four times higher in that scoring area than a checking account alone. Set up an automatic savings plan, no matter how small of an amount is being contributed. Take advantage and invest heavily in your employer’s retirement plan. All of these things show your responsibility.

Pay your credit cards before the due date and always pay more than the minimum. Pay your bills on-time, every time. If you realize that you are going to have to pay a bill late, don’t settle on paying a late fee and forgetting about it. That one late payment will be on your credit report for a long time. Take everything that has to do with your bank account and bills seriously.
If you need some help with your score, investing in secured credit cards can help establish a better credit score when you pay it off on-time for many consecutive months. The bottom line is to be responsible, and your score will reflect your efforts.

Author: Mike Clover

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

Credit Repair

Thursday, November 29th, 2007

You may have bad credit due to some irresponsible moves or some unforeseen events in your life. Protecting your credit score could prove to be very important to your future. There are lots of ways to keep your credit good, but if it’s already looking pretty bad, consider some repair options. One way is to go through a credit repair organization.

If you think you should use a credit repair company to fix your credit problems, you should educate yourself first. Credit repair companies can make a lot of promises, but be careful who you give your information to. There is a lot of deception going on in this industry and there are a few signs that you should look out for.

First, if they ask you for any money up front, then it isn’t a legitimate or ethical company. The Credit Repair Organizations Act says that companies aren’t allowed to ask you for any money until everything that they have promised has been completed. So this should be something that you are mindful of.

Secondly, they should always inform you of your legal rights and the steps that you can take yourself to repair your credit. Crazy promises to remove all bad things from your credit should be ignored. No one can do this. You can investigate your credit files to dispute any inaccurate or incomplete information, but you can’t make negative information just vanish. If a credit repair organization tells you not to contact a credit reporting agency yourself, you should probably hang up the phone and do just that. Anything that a credit repair company can do for you, you can actually do for yourself, for free. Research a little online and find out what your rights are under the Fair Credit Reporting Act.

The Credit Repair Organizations Act is in place to protect you. If you decide to go with a credit repair company, then you should familiarize yourself with the basics of this act before you proceed. We’ve mentioned that they can’t charge you until they’ve completed everything that they’ve promised, but you should also know that they must provide you with payment terms for their services. They must inform you of all fees and a final total amount that will be due. They must give you a detailed description in writing of everything that they plan to do. They have to give you a time line in which the process will be completed. Any guarantees must be in writing and included in the contract. The company’s name and address must also be included on the contract.

Before you sign anything, they must provide you with a copy of the Consumer Credit File Rights Under State and Federal Law. They can’t start working on your credit until they have a signed contract in hand and have completed a three day waiting period. Anytime during the waiting period you have the right to change your mind and cancel the contract, owing nothing. Keep your rights in mind throughout the process and educate yourself before you start. Remember, anything they can do for your credit score, you can do yourself for free.

Author: Mike Clover

Advantages of a High Credit Score

Saturday, November 10th, 2007

Everyone seems to realize that having a high credit score is great, but there are even more advantages than most people know. Qualifying for loans tends to be the advantage that most people focus on, but discovering the other advantages might really ignite an interest to work toward a higher score.

Yes, loan eligibility is an amazing credit score benefit, but getting lower interest rates on those loans is even more important. The better interest rates you qualify for put money directly back into your own pocket. This goes for rates on other services as well. Having a low credit score can actually add one to two points to a motor vehicle insurance premium. Why is this related? Your ability to make responsible payments is also important to insurance agencies, credit card companies, cell phone providers, and more. Maintaining a great score will help you to save money in all of these areas.

If you are an owner of a small business, getting a line of credit or small-business loan may be imperative to your success. If a business is less than three years old, personal credit plays a huge factor in your eligibility and interest rates. At this stage of small business, lenders have trouble making a distinction between your business credit history and your private credit score.

If you are not a business owner and work better in a job atmosphere, there are even rewards in the job market. Many professional employers actual do a credit check before a new hire. These high level employers consider your credit score a representation of your responsible behavior. An employee that has difficulty managing their own finances might not be the best person to take care of company needs. This is especially true for employment in fields that are especially tied to financial practices such as banks, accounting firms, and treasuries.

The biggest advantage to a high credit score is the buying power you will possess. The possibilities for investment and rates on large purchases are much better. You will spend less on a new car, be able to make a big investment in a growing real estate market, or get the loans you need to send your children to the best college. The opportunities are almost limitless when credit is handled well. If you don’t have a great score right now, it is never to late to get started on your way to rebuilding it or building it up for the first time. There are a number of helpful online sources to assist you. Start by getting a free credit score report from an online provider.

Author: Mike Clover

Credit Report Monitoring to Protect Your Identity

Saturday, November 10th, 2007

Identity theft is at an all time high as a result of the digital age of paperless transactions and online databases. Why would anyone want to steal someone’s identity? Some people think it is just for the purpose of starting fresh or getting away from their previous life, but the vast majority of identity thieves do it for money. If they have your personal identity information they can also retrieve your banking information, credit card numbers, and more. Those who are using other identities are usually using many identities for the purpose of stealing money from all of them, perhaps by withdrawing funds from their bank or setting up a credit card in their name. The scary thing about identity theft is that the violators have little care that they may be taking everything another individual owns as well as destroying their credit for a number of years. If a victim is unable to detect identity theft for over six months, it can do severe financial damage. You can of course investigate your own credit reports and accounts regularly, or you can pay for a credit monitoring service to investigate for you.

One of the greatest advantages to using a credit monitoring program is the convenience. Instead of living life, constantly paranoid of identity theft, credit monitors can do the worrying for you. Odds are, a monitoring program will also investigate more thoroughly than the average citizen. Monitoring services commonly monitor new account activity, address changes, collection accounts, changes to account information, credit limit increases, credit inquiries, changes in public records, changes in current accounts, and recently closed or flagged accounts. Yes, all of these things can be equally investigated by an eager individual, but routinely checking all of these cues for identity theft can be tedious and unpleasant. Regardless, it is important to check all or more of these areas to keep a close watch on the possibility of identity theft. Early detection is the key to monitoring your credit before the financial loss has become too great, and with an online identity theft monitoring service, you can just go on living life without the burden of becoming a part time investigator.

When considering a monitoring service, you should first consider where that provider receives information. It is most desirable for an identity theft service to obtain information from the three major credit agencies. How often the service monitors your information is also relevant. The frequency of your credit monitoring will increase your chances of early detection. Various services and programs also vary in how often they release reports and give updates, and some provide actual identity theft insurance in the event that they make a mistake and overlook a thief.

There are a host of things to take into account when deciding how to keep a close eye on your credit information. Identity theft is a very real problem that no one believes will really happen, but the reality is that it happens every day. If you choose not to use an online identity theft service or other credit monitoring program get organized so that you can closely monitor the activities associated with your identity. It will save you so many problems in the future.

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.

The Fair Isaac Corporation

Saturday, November 10th, 2007

Ever wonder what a FICO score stands for? Obviously, this is a credit score, but who determines what that score will be, and what does FICO mean? By learning more about the Fair Isaac Corporation, some of these questions can be answered.

In 1956, and engineer by the name of Bill Fair and a mathematician known as Earl Isaac founded the Fair Isaac Corp., or FICO. FICO originally provided consulting and decision management services, but in 1981 they developed a system for scoring the amount of risk associated with making certain loans and investments. The FICO score is a number generated from an individual’s credit history. By statistically analyzing this report, the FICO system assigns a value to the likelihood that an individual will pay their debts. This value is noted by banks and other lending institutions when determining the interest rates and other characteristics of a loan, helping them to make accurate and profitable lending decisions.

So is FICO a credit bureau? The answer is yes and no. It seems we have all heard of the credit bureaus that gather information about our debts and assign us credit scores. In actuality, they are not credit bureaus at all. FICO and the other similar companies are not associated with the government but are in fact publicly traded companies known as credit reporting agencies. Out of these companies such as Equifax, Experian, and TransUnion, FICO is the most known and widely used credit-scoring agency in the United States.

The Fair Isaac Corporation is headquartered in Minneapolis, Minnesota but has offices throughout five of the 7 major continents and turns a revenue of over $800 million dollar per year. Beyond producing credit scores, their over 3,500 employees provide consulting and management services to more than 200 international retailers, 99 of the top 100 US banks, and over 100 international telecommunications companies. FICO has become a cornerstone for the entire American economy.

Getting your fico score is easy. You can buy your score directly from FICO or you can receive a free credit score report from various online providers. Once you know your score, you can quickly assess what kinds of lending options might be available. A score of 720 or higher is considered worthy credit, or good credit, while anything that drops below a 600 is considered bad credit. With bad credit you will pay more in interest on loans and have more difficult qualifying for certain loan packages. There are many things you can do to improve your score, but the best one is to simply pay you debts.

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.