What Determines a Credit Score?

By Kimberly Kellish

Many of us may not know our credit score, some may not even be aware of a credit score, that is until they attempt to apply for credit of some sort, be it a credit card, mortgage or apartment rental. To most, they view our credit score as a one dimensional number, nothing more, hence the reason it is so important for us to become more aware of what our credit score is. People see our credit score as an indication of who we are as people. Frankly, I don’t feel that I should be judged for not having paid a bi during my college years, but unless we become proactive regarding our credit report, that is how it will be.

Let’s consider the elements that make up our credit report and ultimately decided our credit score. The first factor is payment history. Basically do you pay your bills on time. The second factor they look at is your outstanding debt. How much do you owe and to whom do you owe it? The third factor is length of credit history. I feel this category is very biased against young people trying to establish credit. This category leaves them little to no way to get around, they are only so old, therefore could only have a credit history so long, right? We’ll get into that later. Lastly they look at recent inquiries made by different credit companies be it credit cards, mortgages, etc. and what types of credit you have, credit cards, auto loans, fixed or revolving accounts.

Now many of us may look at these categories and think that, for the most part, the factors are out of our control, unable to be manipulated with, but that is untrue! Let’s look more at each element of your credit report. The first thing we mentioned was payment history. Now this is somewhat straight forward, but many times they may have misinformation or information that is all together untrue! This is why you should always be aware of what is on your credit report, so that you can make sure it is a true representation of you. Secondly is your outstanding debt, this factor obviously is something you need to work on yourself to get the debt down, never pay only minimums on your credit cards, if you can help it. Obviously certain circumstances do arise that make this impossible at times, but you need to become more aware of spending in these times. Loan companies like mortgages, and other types of insurance will look at what is known as your debt to income ration, the ideal ratio is 35%. That means your debt should only make up 35% of your total income you bring in.

The third factor is credit history, the somewhat biased factor. Now I said this is something that you can’t get around, but you can lengthen your credit history at least how it appears on you credit report. How? By asking an older person with good great standing and a longer credit history to add you to one of their accounts as a user on their account, It will appear on your credit report as you having that credit card for as long as the older person has had that account open. Pretty tricky huh?

After looking at this information on your credit report you may find some errors, misreported information or negative items on your report and take the initiative to fix your credit report. This may seem like an overwhelming task but it really isn’t. If you try to just contact a credit agency they will most likely give you the run around unless you know what you are doing, the best ways to negotiate with them and probably most importantly, what your rights are. There are many resources out there to help you effectively negotiate with credit agencies and you should take advantage of others experience and expertise in this area. One site, www.creditrepairplan.com helps to take the confusion and overwhelming aspects of this process away. They help give you a calendar to follow, sample letters to get effective responses from creditors and so much more. They show you how to not get your accounts red flagged and cause you an up hill battle to get anything removed.

Your credit report is something that many may not even think about until they need credit. Take the steps now to fix your credit report and in the end, when you really need credit, you will save yourself with lower rates. Good luck and please, look at your credit report today and make it a true representation of you!

Kimberly has been involved in the financial industry for over a decade. She has taken her knoweldge of different financial issues and turned it into a campaign to help inform the consumer and allow them to make more informed fiancial decisions in the future.

http://nocreditnolife.com

The Dangers of Credit

Credit can be the most convenient “free” tool in life or it can be a burden that some people only escape in death! (Scary, I know). When used properly, good credit is like having a backstage pass to the year’s hottest concert. You receive “perks” that people with regular tickets only dream of. However, what the bad credit folks don’t realize is that they too can receive these insider perks, deals and discounts if they only take the first step in repairing their damaged credit. Some people misuse credit so badly and irresponsibly that they feel that they MUST file bankruptcy due to the sheer number of creditor threats they receive.

In my honest opinion (both through experience and research) no-one should receive any type of loan or evolving account until they have completed some sort of credit management course. Most people don’t realize the impact that ONE negative item can have on their otherwise flawless credit. Vice – versa, most people don’t understand that by removing one NEGATIVE item from a damaged credit report how it can positively affect their file. Credit is not an exact science. It’s not as simple as having all positive items reflected on your credit report. There are a variety of factors that either influences your score higher or lower than the national average. But if you decide to not pay the bills that are shown on your credit report, you are GUARANTEED to drive your score down. This is something that I learned from experience alone which is the basis for most of my articles. To find out more about repairing and maintaining your credit, Please visit the site below. Thanks and don’t delay repairing tour credit NOW!!!

Mark Redd
info@nocreditnolife.com
www.nocreditnolife.com
www.nocreditnolife.blogspot.com

Easy Credit Repair..........Yeah Right!!

Repairing your credit is something that is very “easy” to do …. NOT!!! There are tons of sites online telling you that you should repair your own credit but what they leave out is one simple truth. It is tedious and you are normally going to receive a letter from the credit bureau telling you that the info is correct. Take it from me, I did this for about six months before I realized they did give a d@mn whether the info was correct or not. I wasted countless hours writing and researching until the realization finally set in that the only thing I was doing was going in circles.
The fact of the matter was that there are companies (legal & legitimate) that were able to get more accomplished than I could. Try this, go to a hospital, tell them you are a doctor and ask to be prepped operate on someone. See how far the personnel will allow you to go before calling security. Credit repair works the same way. In order to make any headway, you have to know what you are doing and HOW to do it. You wouldn’t ask the person at the local drive-thru to give you your annual check-up or perform some high-risk surgery on you… would you? While you “CAN” repair your credit the fact of the matter is that your probably will take MUCH longer than someone who is skilled in this undertaking.

If you go to any of the “BIG 3” credit bureaus websites you will note that each has a section on avoiding credit repair agencies. They say that everything that these companies offer can be done on your own but what they don’t say is that they respond to these companies (positively) where you would be lucky just to word the letters correctly so that they’ll “actually investigate” your file. You can improve your credit fairly quickly (3-8 months) but you will need people that are skilled, legitimate, legal, and affordable in your corner. Watch out for all of the “too good to be true” repair scams, and there are tons of them out there.

Do you honestly think the bureaus want to do the work necessary to investigate your file? Take it from me, I repaired my credit within 8 months (560 to 705 and still rising) and didn’t know everything that I know now. Learn from my mistakes and start now.


http://www.nocreditnolife.com/
http://www.nocreditnolife.com/
Email: info@nocreditnolife.com

Written by Mark Redd contributing writer at http://www.blogger.com/www.nocreditnolife.com

Paying your debt may not be easy, but it is simple... if you let it be.
Okay! You feel your debt is out of control and it is too late to say, "I wish I had taken action sooner." What do you do? First of all you don't panic and you keep things as simple as possible. Secondly, look to see just how bad it really is. Third, decide which of 4 actions to take with your debts:

Ignore them.
Pay them.
Negotiate Them
Declare Bankruptcy.
This article will concentrate on #2 Paying Your Debt.

Three Additional Choices Make The Process Even Simpler
Just as there are 4 options available to manage your debt, there are three actions you can take to pay your debt:
increase your income;
decrease your expenses;
some combination thereof.
It is that simple (not easy but simple) and if you keep things simple you can better think your way out out of trouble. Sponsored Links
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Adding complexities, confusions, anxieties, and other non simple complications does not help. It is time for ACTION! So decide and GET THE JOB DONE!

Increase Your Income
By increasing your income even by a little bit, you can apply the extra money towards debt which in turn creates more working money to apply to still more debt. Consider some of the following options:
Sell something
Offer your services in lieu of cash (i.e. offer to mow the lawn or fix up a place for a lower rent.)
Get a temporary second job. If you already have one, get another... this is WAR!
Ask for a raise
The last item is added very cautiously and almost added to Things NOT To Do below. Getting another loan in the eyes of some is often seen as a way out of debt problem. Creditors love this scenario. And sometimes it is actually true. But I heavily caution against this attitude and have an article about it called Are You In Debt Denial. Simply put, you cannot "normally" borrow your way out of debt. All borrowing does is prolong the agony. See why in the article Balance Transfer and Consolidation.

Decrease Your Expenses
The principle stated above "apply the extra money towards debt which in turn creates more working money to apply to still more debt" is the basis for the series Rapid Debt Reduction. I encourage you to view at a minimum the first article in that series Accelerator Margin. Here are some additional ideas:
What do you do when all of a sudden the month is just beginning and you have nothing left? Read Debt Priority. Its cold and its hard. But it's fact.
Call your creditors and ask for lower interest. Surprisingly this often works if you give a good enough reason for a creditor to do so.
Look over your last 6 months of check registers to find out where your money is going. Isolate those items that you can change in your life and make a plan of action to change lifestyles to save money.
Study the following areas at this site.
FREE Money Ideas
Developing a Budget
Frugality
Visit my sister site at Frugal Living

Things NOT To Do.
"When the going gets tough, the tough get going" is an axiom that applies also to debt. But when the going gets tough, it is not time to jump from the frying pan into the fire. See Getting Out Of Financial Hot Water
Here are some cautions and DO NOT'S

Some slick promoters would like you to believe the government can bail you out and are willing to sell you the information to find out how to do it. First of all the material is free and secondly it is not designed for this purpose. See Government Grants - The Truth
Do not run out and grab the first debt counselor that happens by. Sifting Through The Debt Management Industry explores the question who are the good guys and the bad guys in this potentially lucrative industry? A similar though more updated article is Understanding Debt Consolidation Programs.


http://www.nocreditnolife.com