Very Important Things I Learned When I Check My Credit Score

How I Check My Credit Score

First of all I have to make you understand what exactly your score is. It is the lenders who score you to predict likely behavior whenever you get a mortgage, overdraft, loans, credit card etc.

The scoring system done by the different companies are not published and they vary from lender to lender, and this indicates that if you are rejected by one company it doest means that you will be rejected by others also. Credit scoring does not only deal with the choice of the product but it also suggests you how good you can get. For example if your score is too low then you will not get good rates of loans, mortgage etc.

Please remember that a credit report is free but credit score is not. This is a very common mis-perception when people try to find their personal score. Your score is a FICO based number that is a weighed average against all other consumers based on your credit history. Your report is list of your current lenders and balances for each particular lender. Reports will also include your payment history per lender.

Negative marks on your report will include; payments past the 30, 60, or 90 days late mark, any bills that have been moved into collection status (both paid and unpaid) and then just softscore checks for if you are applying for credit.

For a score check:

Firstly you request your credit report from annualcreditreport.com which is free and this site will permits your credit report.

Secondly you have to be enrolled with a credit reporting company to obtain your score, after the monthly fee is charged to you.

There are many other companies who help in credit checking score. A free trial for services is offered by these websites that provides you the Equifax FICO score of yours. FICO scores came in use of the U.S. largest banks

The people who find themselves with a low score face difficulties in qualifying to enjoy the comforts of life. It is always better to have high scoring as it is inversely proportional to the charges and interest rates. If the score is high the rate of interest is lower as it lower down the risk of the financial institution in getting their money back from the customer. So it should be a mandatory thing to check your score on regular basis if you are a national of western countries.

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Tips to Get Bad Credit Cards

At times, when borrowing gets out of hand and repayments are not done on time, you might find yourself in a situation where you can land up with bad credit. Your FICO score show poorly and you can no longer qualify for a loan like everyone else. Why? Well, when you have bad credit, it's not possible to get a credit card like a person normally can since you are at fault and the creditor will have doubts on whether you can make a repayment on time. However, there are lenders who specialize in offering to people with bad credit. Here is a look at how you can find bad credit credit cards:

? Look into reputable lenders who offer cards to people with bad credit. Check their interest rate and opt for someone who is well-known and whose interest rates are low so that you can continue using credit, but at a lower rate of interest.

? Smaller retail store offer the opportunity of buying on credit, so apply for credit cards with them. If they accept you application, make a small purchase and pay about a minimum amount every month.

? If possible, ask someone close like a friend or a family member with good credit history to co-sign a credit card for you.

? Get a secured credit card, which requires you to open a savings bank account with some savings money. The credit you get on the card with be a percentage of the amount in the account.

When you get a bad credit card, it is vital to ensure that all repayments are made on time as the purpose of availing such a card is to get credit balance on track. Paying every month's due is necessary to show improvement in money management skills and also to get a better credit score, which can bring in the rewards of higher credit limit, lower interest rate and a good credit score.

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Things You Must Know Before Buying a Credit Repair Software

If you need to fix your bad credit you might consider buying a credit repair software to do the hard work for you. However there are different opinions about the effectiveness of any credit repair software and not everybody believes that they can really fix bad credit. Here are the things you have to know before you make up your mind about purchasing a credit repair software.

What is a credit repair software?

It is a program that is professionally written to automate the process of fixing bad debt. It does not work like a magic wand and you still have to fill in your details and get your credit report. But obviously the long process of writing long letters to your creditors and credit reference agencies is taken off your shoulder. You will also be presented with a credit score management plan you can follow. This is a great advantage as man people who are trying to fix bad credit are suffering information overload and have no idea where to start their credit repair.

Is a credit repair software going to make your bad credit disappear?

A software itself is not going to make your bad debt go away overnight, it is going to get rid of it much faster than you would be able to fix your bad credit. How long it is going to take depends on how bad your rating is and how much outstanding finance you do currently have. And also how bad your situation is.

Do you have to do anything else to fix your bad credit?

You certainly have to keep an eye on your credit rating and get a credit report initially. You will also be required to get actual balances of your existing credit agreements and fill in your details. But the hard work is done by the credit repair software. It is still your responsibility though to stay away from bad credit.

What is a credit rating management software not suitable for?

If you have been declared bankrupt your credit rating can be made better but never good. This information is going to stay on your credit file for six years at least. Also if you have gone down for an IVA and made arrangements to have your debt written off this information can not be erased for a while.

You do have to take into consideration the details above regarding to buying a credit repair software to be able to make an informed decision.

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Vantage Credit Score - Overview

The Vantage score, a new comer to the credit scoring business, was developed in 2006 by a joint venture between the three largest credit bureaus; Equifax, Experian, and TransUnion. The joint venture is named VatnageScore LLC.

A formula that includes several variables is used to calculate the 3 digit score, which ranges from 501 to 990. The score also uses a lettering system (A-F), like a report card. Experian is currently the only company that directly provides the Vantage credit score.

The score is used by creditors to determine the credit worthiness (or risk) of a person. A low score means the individual is a high credit risk, while a high score means the person is a low risk.

The Vantage score consists of six main categories. Each is mentioned below with a brief explanation. A more in depth explanation should be widely available via the internet.

Payment History

The payment history makes up 32% of the Vantage credit score. This is why paying bills on time is so important. Paying bills habitually late or not paying at all will severely hurt one's score.

Debt Owed

Debt owed accounts for 23% of the credit score and covers a wide range of items. Types of debt (credit cards, mortgages, etc.), the balances of those debts, and the number of open credit accounts all factor in. Having high credit limits with low balances or five years left to pay on a 30 year mortgage will help raise the credit score. Having too many credit cards or owing near the limit of the cards will lower the score.

Balance

Current and overdue balances account for 15% of the score. Recent hikes in balances can cause the score to lower.

Credit History Age

The age of the accounts represent 13% of the score. Having older accounts will help raise the score.

New Credit

The number of new accounts recently opened account for 10% of the Vantage score. If several accounts were opened within the last few months, the score will probably drop. This is due to concerns that the new payments will not be made or will be late. Over time, if the payments are made on time, the positive will balance out the initial negative from opening the accounts.

Available Credit

Available credit accounts for 7% of the score. Having high credit balances along with low utilization helps higher the score.

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Tips on Credit Card Use

Accumulating debt is only ever a good practice if you are in control and that you know what you are doing. Don't let any well meaning friend or relative tell you it is okay and that being in debt to a credit card company is an accepted part of every day life. Credit is bad, it has always been and always will be. It will keep you poor.

Borrowing money to buy something that depreciates in value like a car or expensive music system is double trouble. Not only do you have to pay interest to the credit company or bank but the item you bought goes down in value as the months or years go by as well. By far the best way to purchase is with cash.

As is often the case, people with a bad credit history are constantly hunted down by credit card companies and the likes such as loan companies. They are only interested in maintaining someone in debt for as long as possible and the longer the better as far as they are concerned.

The best idea regarding the use of a credit card is to make sure you pay the balance at the end of the month. Many families pay for groceries and other weekly living expenses by credit card knowing that the balance will be paid at the end of the month, avoiding credit card interest charges and earning interest while that money is sitting in the bank until used to pay the end of month balance.

Another problem with uncontrolled debt is that many of the big companies that we all rely on week to week such as gas and electricity supply companies and even potential employers look down on people with bad credit scores. This is a big reason why you should take care of your credit score and manage it to a reasonably low and controlled level.

If you ever want to buy real estate, such as a home, high credit card debt and a high limit will make a bank or other lending institution think twice at offering you a mortgage. Borrowing money to buy real estate is usually a good move as it rises in value over time and once the mortgage is paid in full the home owner lives relatively cheaply.

Understandably though, sometimes having a small amount of debt is unavoidable. An urgent medical expense or loss of employment can lead to borrowing money to live on. Borrowing money while not receiving a wage is a big no no. A much better idea would be to live with family or close friends until employment is gained.

An even better idea is to always have an emergency fund to fall back on. This is an absolute must. Placing ten percent of your weekly or monthly income into an emergency fund is an easy way to achieve this. Generally, an amount which would let you live for 6 months is ideal.

Having multiple credit cards and using one or more to pay debt on another card is just plain economical suicide. This type of debt juggling is crazy and more often than not leads to big problems, a bad credit rating and having to pay huge amounts of interest. Concentrate on paying down the biggest debt, cut up the card and move to the next card and repeat the process until you are down to a single card.

All the interest that you were paying could probably be spent, leaving you without the need for a credit card. Learning to budget and control your spending habits will make life a lot simpler and even leave you with more money to live with. Budgeting can be learned. If you need advice and tuition your local government, high school or technical institute should be able to help you.

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