Bad Credit: Understanding The Basics

Bad Credit: Understanding The Basics

Many people have heard of bad credit, but some may not know what it means. For a long time, there was no established method for determining the credit activities of consumers. However, this all changed when a company called the Fair Isaac Corporation designed a credit scoring system that is called the FICO score. Because the three major credit agencies have different information on each consumer, the FICO score calculated by these agencies won’t be exact.

Your FICO score has become the best way to determine if your credit is good or bad. To get your store, the information in your credit report is compared to the credit reports of others. Your future credit activities can be determined by this information. When you apply for a loan, lenders will look at the FICO score to determine if they should allow you to borrow money. Having a low score doesn’t automatically mean you won’t be allowed to get a loan.

In the past, having any marks on your credit report would cause lenders not to loan you any money. They had no way of determining which borrowers would pay off their debts. With the advent of the FICO score, more people today who have had problems with their credit in the past are now able to apply for loans. Mathematical models allow lenders to study the behavior of borrowers to decide whom they should lend money to. Banks and credit card companies have taken advantage of this data by making offers to people who have different credit issues.

What is a Good Credit Score Range?

To familiarize you with a bit about bad and good credit scores, credit scores can range from as low as 300 to 850 and above. Bad credit scores generally range between 300 to 550 and can negatively affect your financial history. They pose a threat to potential lenders as they have a higher risk of a loan default while granting a loan to such an individual. Many lenders have expertise in this credit score range and they charge comparatively more fees to compensate for bearing the higher risk. As your credit score increases, loan approval becomes easier and simpler and competitively priced.

For a good credit score range, it should fall somewhere between 700-749. Credit scores above 750 are treated as Excellent (Well Qualified).

In short, those who have problems with their credit can usually apply for loans, but they can expect to have much higher interest rates. The FICO score ranges from about 300 to 850. The closer you are to 850, the better your score is. Statistics show that the average American has a credit score that is about 677. To qualify for loans that have the best interest rates and features, you will need to have a score that is at least 720. If you want to know your credit score, there are a number of services that will charge you a fee for it.

Your credit score can fluctuate throughout the year depending on your financial activity. So you are recommended to regularly check your score. Finding blunders and fixing them in time is the best way to keep adverse effects on credit scores away. The longer an error stays undisputed on your credit report, the harder it will be to fix it. You can also consult experts for tips on how to maintain good credit scores.

A number of factors go into calculating your score. The most important factor is your payment history. How you make your payments will determine about 35% of your score, which is almost half. Failing to make payments on time is one of the leading causes of getting bad credit. Your payment history includes payments on credit cards, loans, and other bills. Filing for bankruptcy can greatly lower your score.

The amount of money you owe will determine your score as well. People who have too many loans and credit cards will have a score that is lower. If you have a long credit history that is good, this will increase your score. Lenders are much more likely to give good loans to people who have established credit. It is important to understand the different things that affect your credit score because this could allow you to maintain a high score.

If your credit score is low, this means that you need to start making payments on time. If you have a large number of loans and credit cards, get rid of some of them. Being responsible for how you manage your credit will allow you to keep a high credit score. Lenders will be much more likely to give you the best rates and features on loans. Even if one lender rejects you, this doesn’t mean that all lenders will reject you. Understanding credit and how to manage it will allow you to remain financially successful.

Related Articles:
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Credit Repair Advice: How To Improve Your Credit Score

Credit Repair Advice: How To Improve Your Credit Score

Credit Repair Advice: How To Improve Your Credit Score

Our credit scores determine much about how we live our lives. We buy practically everything on credit. When applying for a loan, our good credit scores help us receive reasonable interest rates. In fact, from landlords to insurance companies, to utilities, everyone looks at our credit scores, as they are a reflection of our financial health. A healthy credit score may determine what various agencies will charge for their services. Today, even employers check personal credit scores before offering a job.

Knowing more about our credit scores and the factors affecting them may help us build a positive credit history. Some people even rely on professional credit repair services to increase their credit score and maintain a decent history. The reason is, experts know what factors actually play vital roles in enhancing and degrading your FICO rating. And they design a customized plan to improve your credit score using a mix of practices. Some of these can be normal steps like paying your bills on time while others can go far till analyzing your credit reports thoroughly for errors.

Different people prefer different ways – some opt for DIY credit repair tips while the rest of the people go for the best credit repair services in the market. But before you decide whether or not to consult experts for help, let’s look at how they are maintained by the various credit reporting agencies.

Three major credit bureaus – Equifax, Experian, and TransUnion – calculate credit scores. Though they use the same methods and formula to calculate scores, they sometimes come up with a different rating for various reasons. One agency may have more updated information about an individual. A creditor may have shared information with one agency only, but not with the others. Creditors, while checking on our scores, take the average of the three scores from these three agencies.

Credit scores range between 300 and 850. A score of 680 and above is excellent for obtaining mortgage financing at low-interest rates. A credit score of 621 to 679 is an average score and you would have to pay a slightly higher rate of interest. A credit score of below 600 makes us potentially unreliable and harder to obtain credit. When a credit score falls below 600, credit repair steps should be taken immediately.

The following are factors affecting credit scores and basic steps to take to maintain an accurate credit score rating with the credit bureaus:

1. Routinely check payment history and the current credit debt held.

2. Credit history length is a determining score factor. Naturally, the longer a ‘good’ credit history, the better.

3. Do not close old or paid off accounts. These show the credit history length and contribute to higher credit scores.

4. Pay off debts to improve credit scores.

5. On-time payments. Delayed payments appear on credit reports and adversely affect it.

6. An individual’s race, sex, age, level of education, or marital status has no bearing on a credit score, nor does the fact that an application for credit was previously turned down.

Taking care to maintain a high credit rating enables us to receive credit and loans at good rates. Our credit score is a reflection of how we manage our finances and a determining factor for many aspects of our lives. Knowing early on how to have a healthy credit history is the best way to avoid bad credit and limited loan options in the future.

However, there are people who may not have the time and patience to try DIY credit repair practices. If you are one of those, you should look out for the best credit repair services to keep things on track and maintain your reputation among creditors.

More References:

Why Pay For Credit Repair Services? Do It Yourself

Online Credit Repair – Avail of Free Services to Help You

How To Repair Bad Credit

Credit Score Repair – The Higher Your Score, The Better For Your Credit

Credit Score Repair – The Higher Your Score, The Better For Your Credit

Credit score repair means that you want to take steps to improve the credit score you have on your credit report. A good credit score means that creditors see you as a good risk to repay the money you borrow. The higher your score, the more loans and lower interest rates you are likely to qualify for. If you have a low credit score, then you do need to consider ways of credit score repair.

What does my credit score mean? This is one question that people often ask when they get their free credit reports. In order to do well with credit score repair, it is necessary to know what information the score is based on. One important factor is your payment history. There are the details of your accounts, your monthly payments and whether or not you make them on time. If this is what is causing you to have a low credit score, then a simple way of repairing your credit score is to start paying all your bills before the due date.

What’s the Good Credit Score Range?

Well, this is another most common query that people make when they first enter into the realm of credit score and repair. A good credit score allows you multiple benefits like making it easy to apply for home loans, credit cards, etc. But what is considered a good credit score? Credit scores range from 375 to 900. Most people with good credit have a score of around 600 to 650. If you have a score higher than 650, then you are in good financial shape when it comes to getting credit and you don’t have to worry about credit score repair. It is when you see your score below 550, then you have to start taking steps to repair the score.

How can I find out what my credit score means? If you look for information about credit scores online, then you will find the percentages that each of the following is involved in computing the score: payment history, amount of money you owe, length of time you have been borrowing, the types of credit you use and the amount of credit you have received recently. There is also a section of your credit report that tells how many times you have applied for credit in the past few months. If there is a list of names, you have to stop applying in order to do credit score repair.

How to Have a Good Credit Score?

Now that you know the common good credit score range, it’s time to work on improving your FICO rating. But how to have a good credit score? Well, the mediums are many and most of them will bring results sooner than expected. You can even take help from credit repair experts to help you with increasing your credit score.
Credit score repair is not something that will happen after a month of paying your bills on time. It is something you have to work at and it could take six months or more for you to notice again in your credit score repair. Just keep the range of a good credit score in mind and work at paying your bills. No one can do this for you – only you.

Credit score repair is perfectly possible, despite what you may have been told. But don’t expect it to be fast.

More References:

What Is a Bad Credit Score: Check Your FICO Rating

What You Should Know About Good Credit And Bad Credit

Your Credit Scores Again

Beginner’s Guide to Repairing a Bad Credit Score

If you happen to be one of those with a low credit score, don’t worry because help is on the way. Reading this article will give you an idea of what are good and bad credit scores and how to repair your credit score so you get to see positive results the next time you get a copy from a credit agency.

Before you start working on your FICO rating, here’s some information about good and bad credit scores that might help.

Where’s the line drawn between good and bad credit and how can you improve your score?

Normally, credit scores lie between 0-549 (a poor credit score), up to 800 (good credit score), and 1200 for an excellent one. Lenders make use of this number along with your credit report to access your request for a credit card or a loan.

So in case you don’t know what’s a good credit score, you should have it somewhere between 750-800. In case you got a bad credit score, following the tips shared below can help remove those negatives from your report and improve your financial history.
Credit score repair starts by getting a copy of this document from a credit agency. There are three to choose from namely Expedia, Equifax, and Transunion. The basis of this figure lies in your credit history, outstanding debts and length of credit.

The next thing for you to do is to examine it. Most people have at least one or two errors that can be corrected if you have supporting documents to refute those claims. These should be mailed to the credit agency who handed the credit report so they can conduct an investigation and make the necessary corrections if what you say happens to be true.

However, if the negative information is true, the only thing you can do is pay those debts. You have to remember that late payment and charged-off accounts will remain in your record for the next 7 years. If ever you filed for bankruptcy, this will be kept on file for 10 years.

The challenge of paying for debt is that you don’t have to pay the amount in a lump sum. The only way to do this is to pay these slowly and to prevent it from being reported, you have to talk with the creditors regarding your situation and work out a payment plan.

If you are successful in making a deal, then you have to make it happen by coming up with the money. This can be achieved by cutting down on your expenses and using this to pay off the debt that has the highest interest rate. Once you have passed that hurdle, it is time to work on the rest.

The objective here is for you to be able to close unneeded or unused accounts so you end up carrying only 2 credit cards left in your wallet.

It is advisable to end the newer ones rather than the old ones and if there are many, do this over a period of several months. You should verify that they were closed so this will also be reflected in your report.

You can use the same strategy for fixed loan payments but remember that this is just a short term because you will be paying more due to interest but at least it allows you to stay current and aids in credit score repair.

Surely, you want to keep some money to be able to buy necessities like food, clothes, and gas. In order to earn interest, you should open a savings account at your back. This gesture also shows creditors that although you have credit problems, you are determined to get yourself out of the hole.

Repairing your credit score will not be accomplished overnight. You will have to change your lifestyle for a while until things get better and when that happens, you should make sure that this stays that way. If you need help, get a financial adviser who will help you every step of the way so you won’t be in debt again.

What is a Good Credit Score and Credit Score Range?

What is a Good Credit Score and Credit Score Range?

Credit Report and Credit Score is used to check the creditworthiness of a person. A credit score range is based on the data provided by the credit report that indicates payment history, accounts, etc. Today many lenders and retailers take the help of credit reports and credit scores to lend credit. Credit report and credit score help the bank lenders to judge the creditworthiness of a person at the time of allotting him credit.

A person with a bad credit report and score find it difficult to raise the credit whereas the person with good credit score and report does not face any financial stake. The credit report and score provides a true picture of a person’s financial position. But it is the initiative of an individual or financial institution to ask for it. This credit report and score are provided by the credit bureau within a few days of your request.

It is advisable that every person must understand his/her credit report. Initially, the law prohibited for its disclosure but later on it was made available on request. It is vital that one should check his/her credit score and report any errors found. Remember a small error in your credit score can harm your credit report in a big way.

But what is a good credit score?

Well, credit score differs from person to person and is determined by a lot of factors. Generally, credit score ranges from 300-750 but many people have their credit score within 600-750. If you are thinking if 750 is a good credit score, let us tell you that in business terms, a score above 700 is regarded as an excellent credit score. 

Having a good credit score can benefit you in multiple ways, including your credit limit, loan capacity, and more.

Why Check Free Credit Report and Score?

Checking Credit Card does not harm your credit score. Checking removes the bad remark in your credit report and similarly in the credit score. It indicates your financial position in the business. Regular updating of credit report also helps to rectify any major financial error. If you find any error or mistake in your credit report assure that you rectify it immediately.

How can you get your Credit Score?

It is true that the credit score is totally based on the content in the credit report. As the content in credit report varies there is variation in your credit score. If your FICO rating doesn’t fall between the good credit score range, you should work to improve it.  It is possible to view your credit report online just by requesting it. The credit report and credit score that you get through these online services do not cost much.

Source: Credit Report and Credit Score

More References

A Crash Course On Credit Scores

How to Evaluate and Raise Your Credit Score

Easy Steps To Maintain A Good Credit Score

How To Build Your Credit Card Credit History

Throughout your life you’re the history of your credit repayment will follow you. Ensuring, therefore, that you have a good prior history of borrowing money is vital. Insofar as credit cards are concerned, the following is a brief guide to how to build your credit card credit history.

If you have never financed a purchase on credit previously, applying for a credit card can be a little tricky, as the issuer will have no record of yours to judge whether or not you are a credit risk or safe to lend to. As such, before you apply for any of the major credit card issuers, you’ll likely need to apply to either a minor credit card issuer, such as the store, or apply for some form of hire purchase, such as a car loan or to buy a television. Once you have done this, it is then very important that you make the repayments timely and in full.

Provided that you do pay your statement invoices on time and in full, you’ll start to create a good credit history. Obviously no lender will take one payment as evidence of your capabilities to repay your debt on time and in full. However, so long as you continue to this for a period of time, even a relatively short period of time, such as three or six months, you’ll then start to find that other lenders are willing to lend you money based on your good credit history.

If applying for a store card or hire purchase loan does seem an acceptable way for you to create a good history of credit, an alternative you can consider is a secured credit card. Essentially a secured credit card requires you to maintain your credit card from a bank account and the limit of your credit will be a percentage of your account holdings. While not strictly a credit arrangement, the issuer then gets to see that you have the capabilities to repay the credit.

Keep in mind that your credit rating will be essential to any credit card application you make. Consequently, before applying for a card you should really make an application to a credit rating agency to ensure that you have managed to build your credit card history up sufficiently not to have too much difficulty applying. In the event that you think the credit rating report is wrong, you should immediately set out the reasons why you think this to the agency so that you can correct any errors in your history before you apply for the credit card.

Read Related Articles:
How To Build Up Your Credit Rating
Credit Cards And Your Credit History
How To Repair A Bad Credit History

Source:
https://www.creditmergency.com/build-credit-card-credit-history/

How To Get A Free Credit Report & What It Means To You

How To Get A Free Credit Report & What It Means To You

If you are applying for a credit card, mortgage, car or personal loan, you should be familiar with the information included in your credit report. You are issued a number, known as a FICO score, which is calculated based on your previous payment history, number of debts with a balance, recent credit inquiries, and balance to available credit ratio.

Many consumers are aware that they can obtain a credit report, for a fee, from the three major credit reporting agencies. These include TransUnion, Experian and Equifax and they provide your credit report to loan officers, credit card companies, financial institutions and anyone whom you give permission to obtain a copy of your credit file. While many consumers know that credit reports can be obtained for a fee, many do not know that everyone is entitled to a free copy of their credit report from each of the 3 credit bureaus each year. Once every 12 months, you can visit http://www.AnnualCreditReport.com and gain instant online access to your free credit report.

When looking at a copy of your credit report, you will be able to view payment histories as submitted by each of your creditors, current and previous addresses along with any information included on the public record. This may include civil judgments, bankruptcy or foreclosures, etc. If any of the information contained in your credit file is incorrect, you have the right to dispute that information directly with the credit bureau. At the time a dispute is submitted, the credit reporting agency will investigate and correct any errors that are made.

Additionally, if you are turned down for credit at any time, the creditor must provide you with a written reason for the decline. At that time, you may request a free copy of your credit report from the agency that provided the information to the creditor. By sending a copy of the denial letter to the credit reporting agency, they are then required to provide you with a copy of their entire file relating to you and your credit history.

It is recommended that consumers check their credit file every 6 months to ensure that information is accurate and to prevent or detect identity theft. If you notice an invalid address or credit line that you never applied for, this is an indication of possible identity theft and should be dealt with immediately by calling the credit bureau and having a fraud alert placed on your file. An informed consumer is a happy one.

Source:
https://www.creditmergency.com/get-free-credit-report-means/

Just Click And Start Your Credit Repair With Bad Debt Personal Loans Online

Just Click And Start Your Credit Repair With Bad Debt Personal Loans Online

Searching bad debt personal loans in the market is not as easy as it sounds. It is a time consuming and troublesome matter. In that case, you can opt for online bad debt personal loans that will make your search faster.

Nowadays, many lenders offer bad debt personal loans online. These loans are easily available. You just need to fill up an application form only with all valuable information about you and after that, the lender will contact you automatically with the best suitable deal.

Generally, bad-debt personals loans online are categorized as secured bad debt personal loans and unsecured bad debt personal loans. Secured bad debt personal loans are obtainable against collateral. That could be the automobile, your home or other real estate property. Whereas, no collateral is required for unsecured bad debt personal loans. So, these loans are appropriate for tenants and those people, who do not want to put their property at risk.

Usually, with secured bad debt personal loans online you can borrow 125% of your property value and that could be from £5,000 to £75,000. So, using valuable collateral is the best way, if your loan amount is comparatively high. And the duration of the repayment term is ranged from 5-25 years. But unsecured personal loans online for bad debt carries a relatively high rate of interest, as these loans are given against no collateral. With these loans, the borrowed amount could vary from £500-£25,000 with a repayment period of 6-10 years.

However, before applying for a bad debt personal loan online, you should be aware of your credit score. Your credit score is the main factor that will decide how much you will pay for the loan. Besides, if you know your credit score, then you will be able to prevent yourself from getting duped by loan lenders.

At the same time, it is also necessary to maintain a balance between your borrowed amount and your repayment capacity. Bad debt personal loans online provide you a chance to get rid of your debt burden and improve your credit score. But if you fail to repay the amount, then your burden will be increased more. Thus, try to take an amount that is less than you can afford. Start with a small amount and try paying it back on time. It will improve your credit score along with loan repayment credibility.

Easy availability of bad debt personal loans online has made it famous these days. These loans are hassle-free and extra paper works are not required. With these loans, you will not only resolve your money problem but also be able to restore your credit history.

Source:
https://www.creditmergency.com/just-click-start-credit-repair-bad-debt-personal-loans-online/

Avoiding Bad Credit and Repair

Staying in contact with your payments each month can help you avoid bad credit. If you research the marketplace before coming to a purchasing decision, you are well on your way to avoiding bad credit and repair credit hassles.

You want to consider all applications, including credit cards, student loans, mortgages, and car loans carefully to avoid being overcharged. Making the wise decision ahead of the game is the ultimate solution to maintaining good credit.

Most people when taking out a home mortgage loan are not aware of the options available to them. Many will walk in the bank door, fill out the application, and accept the terms & conditions when offered to them.

If you ever heard the many reports that swept the pages of newspapers, television and other advertising sources families and individuals are filing bankruptcy because they cannot afford their homes anymore. This is because these people did not take the time to check the marketplace first and searching the options available to them.

As you can see, the millions reported are in debt and searching for a way to repair their credit. The solution then to avoiding bad credit and repair is to research, invest wisely, make good decisions, and budget. Being informed and educated is two of the best tools offered to us.

There are mortgage loans that offer overpayments and underpayments and these loans include vacation packages and lump-sum payments to the borrowers. There are also other loans available that offer low mortgage monthly installments and low-interest rates with insurance policies attached that will pay your mortgage if you are sick, unemployed, in an accident and so on.

On the other hand, there are mortgage loans that have high-interest rates, high mortgages, and balloon payments attached.  When balloon payments are attached to home mortgages it is almost guaranteed in a few years you will be searching for a solution to repair your credit.

There are very few home lenders willing to tell you the truth about the variety of home loans available. Most of the lenders are making money and you are a source of income. It is important to scope the terms & agreements carefully as well as reading all fine print on any loan contract before you sign. If you want to avoid bad credit and repair, you want to stay on the right path.

Loans are agreements that are made between two parties and attached are interest rates and other fees. If you are applying for a home loan and want to avoid bad credit, it makes sense to learn what the fees include and how much those fees are.

Anytime you take out a mortgage loan there are upfront fees attached. In some cases, you can get a home for little or no cost. Searching the marketplace can save you time and money.

Source:
https://www.creditmergency.com/avoiding-bad-credit-repair/

Five Tips For Building A Good Credit Score

Five Tips For Building A Good Credit Score

Improving yourself is always a good thing. If you thrive hard to become a better public speaker, you can might yourself a promotion. Exercising and going to the gym can help you lose weight and have the figure you have always wanted. But the best thing of all is improving and building your credit score, this can help you save hundreds and thousands of dollars on your biggest purchases.

For some, it may be hard to keep up a good credit score but actually, improving credit is not that hard to achieve. You just need to be patient and learn a little bit about the credit scoring system and how it works.

A person who is patient and willing to improve their credit profile can do it easily. There are five things that they can follow in order to boost their credit scores.

1. Check your own credit report from time to time. It is necessary to regularly check your credit and take the steps to remove any inaccuracies in your credit report. Sometimes bad credit is caused by simple inaccuracies in the report. If you see something, contact your creditor immediately, and work to correct the error as soon as you can. Leaving an inaccuracy on your report counts against you.

2. Be on time with payments. Literally, it means that you have to pay all your bills on time. If you are always late with your payments, it will affect your credit report and score. Also, collections and bankruptcies have the most negative effect on your credit report. All reports including the late payments are noted and written in your credit report.

3. Learn how to manage your debt. You must maintain the balance of your credit report to 35% of your available credit limit. Make sure that you always watch your accounts and estimate if you can still handle the using more credit.

4. Avoid unnecessary inquiries. Every time you make an inquiry, it is written in your credit report. Even if you have no plan to open a credit account, your inquiry records will show how often someone has looked at your report and will cast doubt on your ability to pay. So as much as possible, do not make an inquiry into your credit report unless it is important.

5. Give yourself time. Time is considered one of the most significant aspects that can help improve your credit score. Time management is important to get yourself on the right track and show that you can handle your credit responsibly. You can also keep even the oldest account open in order to help make your credit use look longer.