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Your Credit Score and Your Life

Your credit score is one number you can’t afford to ignore. We all know we have one, but what you may not know is that your credit score affects not only how much you will pay for your house and car, but how high your insurance premiums are for that car and home. Get help to Fix your credit score! You can use something like Scott Hilton’s Smart Money Secret book or go about it on your own. Learn more about the important ways credit scoring affects your life:

  • The amount you will pay in your monthly home mortgage payments
  • The interest rate on your credit cards and car loan
  • The amount you’ll be charged for Insurance Premiums

WHAT IS YOUR CREDIT SCORE?

Based upon the information in your credit report, the Fair Isaac Company (FICO, as it’s more commonly known) generates your credit score. Credit Scoring depends upon a number of factors, including: how long you have had credit, how much credit you are currently using, and your history of late payments. Your FICO score usually ranges between 620-850, and is used nearly every time you apply for credit.

Here’s a rough guideline of what kind of credit risk you would be considered by your creditors, based upon your credit score:

  • If your credit score is XXX, your credit could be described as EXCELLENT credit
  • If your credit score is XXX, your credit could be described as VERY GOOD credit
  • If your credit score is XXX, your credit could be described as FAIR credit
  • If your credit score is XXX, your credit could be described as POOR credit

GET HELP CALCULATING YOUR CREDIT SCORE

Fixing your credit score means fixing your credit report. Learn how your credit report is used to determine your credit score.

Late Payments” – Don’t Make them.

Your history of paying your bills on time figures prominently in any calculation of your credit score. There are generally three ways that a late payment is marked on your credit report by “30 Days Late,” “60 Days Late,” and by “90 Days Late.” The damage you do to your credit increases depending on how late the payment was. For example, 30 days late is better than 90 days late, even if you know you are going to be late with a payment, get it to the creditor as soon as possible, it will be better for your credit if you do.

Length of Credit History” – Longer is better.

Generally, the longer you have had open credit lines, the better your credit score. A person with a longer history will usually have a higher score than the person with a shorter history (late payments and other negatives not being considered). While it’s all well and good to want to get rid of all your credit cards, especially the ones you don’t use, keeping your older credit lines open (and using them wisely) is one way to help increase your credit scores.

Amount of Credit Used” – Follow the 30% Rule

If you have a $1,000 credit line and you have charged $500, then you are using 50% of your available credit and probably too much. Your credit score will go down if you begin using too much of your available credit, because creditors look at your available credit and debts, and wonder why you don’t have enough money to pay them down. But you can help raise your credit score if you’re willing to start paying your credit cards down.

Generally, if you help reduce your amount of debt to 30% of your available credit, then you generally should see a raise in your credit score. So try not to use more than $300 for every $1,000 of your available credit. For example, if you’re credit line is $2,000, try to keep your balance below $600. (Just multiply $300 for each thousand of available credit, and you’ll get a good guideline).

Number of Inquiries” – Applying for too much credit will negatively affect your score.

Strangely enough, sometimes applying for any credit at all will negatively impact your score (although usually the effect should be lessened after 6 months to a year). Every time you apply for a line of credit, a creditor checks your credit report, when they do, it is recorded on your report. That’s why you should never let anyone check your credit, unless you need to.

Check out our Credit Repair FAQs

WARNING: Don’t ever let any company repairing your credit run a credit report ON you. Always get your credit report yourself. There is nothing to worry about when checking your own credit report, your credit score will NOT suffer (and only a “soft inquiry” will result). When you check your own report, it is completely different from someone else requesting a copy of your report (it will generate a “hard inquiry” and will look like you are applying for credit). We will give you all the instructions you need to get your credit report without getting hit by negative marks. We want to give you better credit score help. When you’re ready to get your credit reports and get started repairing your credit score, click here for our Smart Money Secret Review.

Credit Repair FAQs – Fixing Your Credit is Hard! Getting Online Credit Repair Help is Easy

Here are the answers to some of our most asked questions.

Q. Is it legal to repair my bad credit report?

A. Your right to repair your credit report is protected by law. There are a number of federal laws, like the Fair Credit Reporting Act commonly referred to by the initials FCRA, that already protect the credit rights of consumers, including the right to dispute negative and incorrect items that are damaging your credit report. It is important to understand that the credit bureaus that compile the information that makes up your credit report are for-profit businesses that make money off your credit report. They are obligated by law to investigate and correct negative and inaccurate information that appears on your credit report. Follow this link to read the entire Fair Credit Reporting Act (FCRA).

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Q. Can I fix my credit report myself?

A. You absolutely can. And don’t believe anyone who tells you that you can’t do-it-yourself, because you can. Do make sure you learn everything you can about repairing your own credit before you begin. Don’t think it will be easy, it takes a great deal of time to learn about the legislation that governs the credit industry. It’s not easy to learn everything you need to know about your legal rights and the way to go about disputing incorrect and negative items, but it is possible.

You need to be organized, committed, and disciplined to be successful at repairing your own credit. And if you don’t believe you have these skills, then it may be advisable to hire a credit repair professional to do it for you. If you do decide to go it alone, first be sure to check out our review of what we believe is the best DIY credit repair book currently available, Smart Money Secret by Scott Hilton.

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Q. Why are people with bad credit forced to pay higher prices for things?

A. The rationale is that people with lower credit scores present higher risks. Credit cards, banks, even Credit Bureaus make more money off people with lower credit scores. For example, a credit card starts charging sky-high rates if you miss even one payment, a bank charges a higher percentage rate on a home loan, and the credit bureaus make more money off people with “bad credit” because they have their credit reports pulled more frequently. Basically, the whole industry thrives off bad credit, and it’s surprisingly easy to fall into that category. Even a couple of points on your credit report can mean the difference between thousands of dollars.

A lower credit score means a higher cost for just about everything, including your home. Just look at the cost of buying a $200,000 home over the course of a 30-year fixed rate mortgage. The average person with a bad credit score (ranging from 620-639) pays $74,970 more for the same house than someone who had a credit score of 760 or above. The differences are dramatic. And even if you don’t own a home, the same thing happens to a lesser extent everyday with higher credit card payments, higher car loan payments. Everything costs more with “bad credit.” In addition, people with lower credit scores are excluded from money-saving specials, like 0% interest offers that are extended only to well qualified credit applicants.

Here’s a quick look at what two different people would pay for the same house:

HIGH CREDIT RATING                                         LOWER CREDIT RATING

Interest rate based on                                               Interest rate based on
Credit score of 760-850                                             Credit score of 620-639
$200,000 x 5.62% for 30 years=$414,245                   $200,000 x 7.21% for 30 years=$489,215

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Q. Do I need a lawyer in order to repair my credit?

A. No. Anyone can fix your credit, even you. Credit repair is a service that many consumers find valuable because of the time and money involved. It is a time-consuming and demanding process and it would be hard to imagine that there are actual lawyers working on your case. It is likely, that the most a company claiming to be a “law firm” can probably claim is that a lawyer will “oversee” the people who are actually working on your credit report problems. There are very few cases that would call for a lawyer to get involved, and in almost all cases a lawyer will not be involved in the details of your case. If you have any doubt about whether the advice you’re receiving from a “law firm” is actual legal advice, then check their “terms of use,” and you will see when you read their fine print that nothing they do constitutes legal advice, and you will enjoy none of the benefits of the attorney-client relationship.

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Q. Can I create a new credit identity to improve my credit score?

A. Absolutely not. There is no way to create a new credit identity legally. Do not engage in any practice or hire any company that involves getting “a new credit report overnight.” Don’t fall for it, and don’t let these activities go unreported. We do everything we can to bring bad credit practices and the people who make money off them to light. Please report any individual or business who are ripping people off with bogus credit claims by reporting them to your state’s attorney general’s office and the Federal Trade Commission. We strongly urge you to report anyone who offers you a “new credit identity.”!!! Use this link to contact the Federal Trade Commission (FTC) to report Credit Identity Scams.

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Q. Can repairing negative items damage my credit report?

A. Not if you know what you’re doing. We know how to dispute negative items so they will not be dismissed as “frivolous disputes” by the credit bureaus. We’re a reputable credit repair company, we know how to dispute negative and incorrect items according to the letter of the law. Exercise your legal rights under the Fair Credit Act Regulation (FCRA), you will not be penalized for making legal and legitimate attempts to repair your credit. But your credit could suffer if you start the process without knowing what you’re doing. So, just be sure to get educated about the process or get someone to do it for you. Or else you could damage your credit without meaning to.

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Q. Do I need proof before I can dispute my credit report?

A. No. The burden of proof is on the Credit Reporting Agency or Credit Bureau, because they are the ones who are claiming the information they report is correct. They are the ones who placed the info that appears on your credit report in the first place. It is important to remember that the Credit Bureaus are just compilers of information (granted your credit report is some very important info). The people who work there are just trying to do their job, but mistakes happen, as they always do when humans are involved. And mistakes are happening all time, more than 79% of American consumers have errors on their credit reports according to a recent important study by The Public Interest Research Group. The good news for consumers is that the Credit Bureaus must be able to defend their reason for putting the information on your report in the first place. And they are legally obligated to conduct an investigation into your claim. As you can imagine, they really don’t want to have to do that (they basically don’t want to do anything that will cost them time and money), so getting them to actually fulfill their legal obligation can be a chore. We have the in-depth knowledge of the consumer credit laws (the Fair Credit Reporting Act or FCRA, The Fair and Accurate Transactions Act or FACTA , The Fair Debt Collection Practices Act or FCDPA) needed to make sure your claim is investigated and your rights as an American are protected against the multi-billlion dollar credit industry.

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Q. Does it always take 7 years before I can get a negative and inaccurate item deleted from my credit report?

A. Absolutely not. The Credit Bureaus are merely people who store the large amounts of info that become your credit report. And people make mistakes. Fortunately, legislation has been designed to establish a system of checks and balances on the credit industry to protect you from negative and inaccurate information that could be damaging your credit report. There’s too much at stake to allow bad credit to be a part of your life for 7 whole years.Don’t believe the Credit Bureaus, or anyone else who tells you that you should just patient and it will come off eventually. Every time the Credit Bureaus receive a dispute, it means extra work for them to conduct an investigation into your dispute. If they have to change something it costs even more money, so you can see why they don’t exactly encourage it.