FICO reveals behaviors behind sterling credit scores
News from Inman.com:

Credit cards image via Shutterstock.

Tight mortgage lending standards have dashed the hopes of many would-be homebuyers, but the developers of the most popular credit risk score today revealed some habits and behaviors of “high achievers” with FICO scores above 785.

More than 50 million people — about a quarter of all people with credit scores — are considered high achievers and tend to have “strikingly similar” credit habits regardless of background or life experience, San Jose, Calif.-based Fair Isaac Corp. said.

Some of these habits are fairly predictable: They keep low revolving balances relative to their available credit, don’t max out their credit cards, and consistently make payments on time.

But high achievers are not debt-free. They have an average of seven credit cards, including open and closed accounts, and carry balances…………… continues on Inman.com

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Do You Know Which of Your 49 FICO Credit Scores Your Lender Is Looking At?
News from Go Banking Rates:

If you’ve been relying on your FICO score to help you determine whether you qualify for a credit card or loan, you will be disappointed to learn that the score you’re offered by Fair Isaac may not be the one lenders use to determine your eligibility.

According to a recent study presented by the Consumer Financial Protection Bureau (CFPB), lenders may be examining anywhere from 49 FICO scores when deciding whether to grant you a loan, which means you may be completely off-target when you perform a credit score check.

Your FICO Score Isn’t as Accurate as You Think

After years of trying to figure out exactly what your FICO score means when acquiring a mortgage loan, credit card or auto loan, it can be disheartening to learn that the score you check regularly may mean very little when you actually visit a lender.

The CFPB study analyzed 200,000 credit files from the three major credit bureaus: TransUnion, Equifax and Experian. It found that one out of five consumers is likely to receive a FICO score that is “meaningfully” different from the score used by a lender to make a credit decision.

The reason for the discrepancy is that lenders have approximate…………… continues on Go Banking Rates

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Things to do to improve my credit score
News from WPTV:

WEST PALM BEACH, Fla. – These tips are from Darish Still, President and Chief Executive Officer of Consumer Credit Management Services, Inc.

Three 3 tips can help you improve your credit score:

1.    If you are not current on your accounts, get current and stay current.  35% if the score considers your ability to pay your bills on time.

2.    Keep your account balances low.  If your balances are high, pay them down.  30% of the score looks at the amounts owed on your accounts.  The general rule is to keep your balances below 1/3 of the accounts available credit.

3.    Open new accounts only as needed.  15% if the score considers how long you have managed credit.  One of the numbers considered is the average length of credit history.  Opening new accounts decreases this average resulting in a lower score.

Monitor your credit report annually by visiting www.annualcreditreport.com . It’s a free service that gives you access to your report from all three major credit repositories. Studies show that 70% of credit reports contain errors which can affect the score.  By closely monitoring your report you can detect these errors or any fraudulent activity which can also lower scores.

Copy…………… continues on WPTV

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1.4 Million No Longer Plagued with Low FICO Credit Scores
News from Go Banking Rates:

After years of being stuck with a bad credit score, Americans are finally pulling themselves out of the rock-bottom tier of FICO scores. If you want to see your credit score increase, you are not alone. But with lending still tight, you’ll need to continue taking the right steps to improve and maintain your score.

Fewer Consumers Plagued with Low FICO Scores

Times have been tough for Americans who struggled with lower FICO scores since the Great Recession. Many unemployed, yet responsible borrowers were unable to pay their bills, which resulted in more than 43 million Americans with credit scores at 599 or lower in 2010, according to FICO Inc.

The good news is FICO scores are rapidly improving. Compared with last year, about 1.4 million fewer people had scores in the lowest tier range of 300 to 549.

According to the company, some bad credit score improvements were the result of more cautious financial habits. But not all score increases were positive. Some people already had such low scores before the recession that lenders completely stopped lending to them and, as a result, they started using debit cards.

Others have resorted to payday loans and other unconventional…………… continues on Go Banking Rates

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How to Spend Your Way to a Better Credit Score
News from Opposing Views:

A woman who was turned down for a loan recently came to me for advice to find out why she was rejected. Sitting at my desk, she said she had perfect credit. When I asked her why she thought her credit was perfect, she replied that she should have perfect credit because she had no problem paying her bills. I asked to see her credit report and there was nothing on it.

It’s a common misconception that we start out with perfect credit and it gets worse with every loan or credit card we obtain. As a result, people avoid taking out loans and they cut-up or cancel credit cards they no longer use.

Unfortunately, this well-meaning advice is incorrect.

I’ll illustrate it this way: If you were going to loan your car to someone, would you rather loan it to someone who had never driven before or to someone who had a perfect driving record with years of experience?

Obviously the answer is that you would feel better about lending your car to someone with years of great driving experience. And the same is true for money lenders: They prefer to lend to someone who has proven in the past that they would pay back the money they owed.

Therefore, our credit scores grow when we borrow money and pay it back on time and in full, and decline when we don’t borrow money or when we don’t pay it back on time.

So one of the best skills you can lear…………… continues on Opposing Views

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FICO 8, Not FICO, Is Used In Recent Credit Company Report, Adding To Consumer …

FICO 8, Not FICO, Is Used In Recent Credit Company Report, Adding To Consumer …
News from Huffington Post:

Trying to explain how a credit score is actually calculated is like explaining why the sky is blue to a 4-year-old. Impossible.

And the credit industry is not helping their own cause.

On Friday, the New York Times’ Bucks Blog called out FICO, which compiles the most widely used scores, for a lack of transparency in a recent well-publicized survey that claimed credit scores were on the rise.

The survey, which FICO published last week, showed that the number of consume…………… continues on Huffington Post

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Debt Settlement, Credit Reports and Debtor Reputation; American Financial …
News from Seattle Post Intelligencer:

Paying less to get out of debt seems like a great solution. But there are real ramifications to your credit and credit score when using debt settlements to manage debt. Credit counseling agency American Financial Solutions provides the information needed to make the right decision about settling debt.

Seattle, WA (PRWEB) May 10, 2012

Many people dealing with unpaid debt have received letters or phone calls from collection agencies offering deals to settle accounts for less than the full balance owed. When someone settles a debt, it means they pay off a portion of what they owe to the creditor. This sounds very enticing, but that discount on debt comes at a very high cost to an individual’s credit report and reputation. Below, American Financial Solutions outlines the dangers of settling debt.

The damage done to a credit report from a debt settlement is significant. During the settlement process, many collection agencies make it sound as though, once paid, the account will show in good standing on the credit report. The reality is that the account will be marked on the credit report as settled for less than full balance. This is a derogatory mark and may cause future lenders to be leery of approving a loan applicatio…………… continues on Seattle Post Intelligencer

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Going on a Credit Card Fast: Will FICO Care?
News from Credit Card Guide News:

Dear Erica,
I’m considering closing and cutting up all of my cards and living without credit cards completely for awhile. If it goes well, maybe forever. Can you tell me what this will do to my credit score that’s already A-1? Right now my score is almost 800 and I’d like to keep it that way just in case. Thanks in advance for your response. — Denise

Dear Denise,
I must admit that I’m a little baffled by your wish to destroy your credit cards. With such an impressive credit score (a FICO score in the mid-700s and above is perceived as excellent), it appears that you’ve been using them effectively.

Perhaps you don’t agree with your credit card companies policies or you don’t like their terms? Are you morally opposed to borrowing? Or maybe you’ve gotten into trouble with credit cards in the past and are afraid you’ll go dow…………… continues on Credit Card Guide News

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The Latest Credit Card Trap: No Limits, Just ‘Access’
News from DailyFinance:

Credit card issuers are at it again.

For years, the financial institutions behind the plastic in your wallet have used a host of methods both subtle and brash to up your costs and their profits. But now that the Obama administration’s CARD Act is fully in effect, banks’ ability to make money from such fees and penalties has been cut — sometimes dramatically.

Is it any surprise that the banks are pushing back, looking for creative ways to recoup those lost fees?

“They were making a ton of money on people overspending, but with the economy and new rules, they are shaking people down to recover for fees they shouldn’t have been charging in the first place,” says Ira Rheingold, executive director of the National Association of Consumer Advocates.

Admittedly, some banks are in a relatively precarious position. According to industry consultants and insurance brokers Marsh & McLennan, it costs most banks between

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7 more ways to raise your FICO score
News from Fox Business:

From our recent CardRatings article “7 ways to raise your FICO credit score”, you know the basic moves to improve your credit score include establishing credit early, ditching debt and correcting credit report errors. Now it’s time to make your score soar. These seven advanced tips will help increase your credit score even if you can’t increase the payments on your current debt.

  1. Get some goodwill

    Behave yourself and card issuers could raise your credit score for you, says Deborah McNaughton, author of “The Essential Credit Repair Handbook.” If you’ve only got a few dings keeping your credit score down, request a “goodwill deletion.”

    “You’re basically requesting that they remove a negative item because you’re such a good customer,” she says. “If it’s something that’s happened once or hardly ever, the more years you have with that cr…………… continues on Fox Business

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7 more ways to raise your FICO score
News from Fox Business:

From our recent CardRatings article “7 ways to raise your FICO credit score”, you know the basic moves to improve your credit score include establishing credit early, ditching debt and correcting credit report errors. Now it’s time to make your score soar. These seven advanced tips will help increase your credit score even if you can’t increase the payments on your current debt.

  1. Get some goodwill

    Behave yourself and card issuers could raise your credit score for you, says Deborah McNaughton, author of “The Essential Credit Repair Handbook.” If you’ve only got a few dings keeping your credit score down, request a “goodwill deletion.”

    “You’re basically requesting that they remove a negative item because you’re such a good customer,” she says. “If it’s something that’s happened once or hardly ever, the more years you have with that cr…………… continues on Fox Business

… Read the full article
.

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Home Buyers Face Tough FICO Score Requirements
News from Credit Card Guide News:

The tight economy isn’t just eating away at Americans’ pocketbooks. It is affecting FICO score requirements as well.

Recent data suggests that to get the very best terms on mortgage loans, excellent no longer suffices. It may be that only those with stellar credit get to take advantage of the record-low rates that are currently available on 30-year mortgages.

According to the Mortgage Bankers Association, as reported in Mortgage News Daily, almost half of new mortgage loans — 46 percent — written in the first quarter of this year were issued to consumers with credit scores above 750.

In contrast, less than one third of new loans in the third quarter of 2008, just before the onset of the credit crisis, were issued to consumers with scores above 750. (
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Getting the Lowest Mortgage Rates
News from NASDAQ:

Everyone wants to get the lowest possible mortgage rate – so how do you go about getting it?

Have Good credit

 

The first thing is you need to have good credit – that’s a no brainer. The higher your credit score, the less interest you’ll have to pay.

One thing to remember about credit scores is that small differences can have a significant effect on the interest rate you get. Lenders rank credit scores in tiers, or brackets. If you’ve already got decent credit, moving up or down into the next tier will make a difference of about 0.2 percentage points on the interest rate for a 30-year mortgage – for example, 4.4 percent instead of 4.6 percent.

There’s not a lot you can do to improve your credit in a hurry. Paying down a high debt load is one exception, particularly if it’s credit card debt. If you’re using over one-third of your total debt limit, it could be hurtin…………… continues on NASDAQ

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How your FICO credit score is calculated: New credit
News from CreditCards.com:

By Jeremy M. Simon

This is the fourth of a five-part series examining what goes in to creating your FICO credit score — the three-digit number that helps determine how much you can borrow and on what terms. Each part of the series will take an in-depth look at one of the five basic components of the credit scoring model. Today: new credit.

If you’re not careful, taking on too much new credit too quickly can hurt your FICO credit score.

However, adding some “new credit” to an old, troubled account may actually help your score.

Confused? Welcome to the complex world of the FICO credit score.

That score is used by lenders to decide whether to extend credit to a potential borrower and at what terms. In calculating the score, FICO looks at, among other things, loan applications and new debts that were added to a continues on CreditCards.com
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Back-to-School Special: 10 Credit-Card Tips For Students
News from TIME:

Even as school starts up again around the country, students may already be falling behind in one critical area of knowledge: How to choose and use credit cards. Unfortunately, until financial education is taught in high schools across America, students have to enter the world of consumer credit on their own. We talked to a couple of credit experts to ask them what they would tell students if they were teaching Credit Cards 101.

1. Read the fine print. This is obviously good advice for anyone, but consumer advocates say it’s most important for young people who are inexperienced with financial products to read everything before signing on the dotted line. And don’t be afraid to shop around, says Amber Stubbs, managing editor of the card-review site 

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7 ways to raise your FICO credit score
News from NASDAQ:

If you want to save big money on a big loan, do your homework, say the experts. Raising your credit score by as little as 40 points could qualify you for a lower interest on a home mortgage or an auto, student or personal loan.

Think of it this way–if you take out a $ 50,000 loan for 15 years with a 7 percent interest rate you will pay nearly $ 5,000 more in interest than if you borrow the same amount at 6 percent.

Check these seven action steps to help ensure that you have the best credit report before applying for a loan.

Pull your report

Amber Stubbs, managing editor of CardRatings.com, says that future borrowers should get a copy of their credit report from the three major credit bureaus and take a glimpse at what their lender will see.

“You want to pull those three reports and make sur…………… continues on NASDAQ

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