As of 2009, bankruptcy filings that were new increased by over thirty five percent in only one year. Although it may seem like a dismal sign, one good way to look at it is that all of these people are on their own paths to rebuilding their credit scores and ultimately, financial freedom. We have all seen the commercials with “people just like you and me” prodding us to visit whatever website and find out what our credit score is. We know that if the number is high, it’s a good thing. It it’s low, it could mean trouble finding a loan, getting a job, or a new place to stay. But just what is a credit score?
Your credit score is packaged up in one (hopefully!!!) three digit number that is based on a statistical analysis of your very own personal credit file. A credit score’s purpose is to give you a major headache, and for the banks to review your capacity to take on debt and repay a credit obligation. That is why credit card companies and banks will look over your score to figure out how much credit they want to decide and offer you and at what interest rate.
So how is your score determined, you might ask? The Fair Issac Corporation, or as you might know them, FICO, was the first organization to build a scoring system in 1958. The report recently underwent a makeover (FICO 08) but it is not utilized by all agencies. In this new, improved FICO 08 version, minor credit delinquencies aren’t counted against you when you for the most part do a good job repaying your debts.
There are five questions that a credit score asks. What is your payment history? How much debt do you currently owe? Just how long have you had credit? How many times have there been credit inquiries made on your report? And what type of credit do you have? So let’s say, for argument’s sake that you screwed up. Just how long will negative marks impact your credit score? Well, that depends on the type of information. Plain old negative information can stay on your credit report for up to seven years. In the case of bankruptcy filing it can remain on there for up to ten years. Here is where we get into the creepy big brother aspect of credit reports. Every person has their own personal credit file, and what this means is that the impact from person to person will affect each differently.
If you are considering filing for bankruptcy, concerned about your financial situation, or just want to know more and feel more secure, it is in your best interest to seek out the advice of a financial planner. One that works for a fee is preferable, because they will have your best interest at heart and not their commission instead. Good luck in your financial journey!
Rapid Recovery Solution is a medical collection agency.
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- Getting A Good Credit Score
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- Paying The Balance Won\’t Help Your Credit Score If You Are Maxing Out Those Credit Cards
Are your credit scores poor fair good excellent? Does it matter? Well it does when you apply for credit. Whether it’s for a credit card a mortgage or a car loan, the lender is going to determine if you are a good candidate for lending money, based on your credit score. An excellent credit score? You can get that dream house. A poor credit score? You might have to beg for a high interest rate credit card.
Credit scores of poor fair good excellent can also affect your life in the sense that this score can be taken into account in determining everything from getting a cell phone to being approved for insurance. In some cases employers view a candidate’s credit score to determine their reliability and credibility.
Although the rating for credit card scores is poor fair good excellent, the score is often given a numerical number which is based on that person’s credit history. Lenders will not only determine if you’ll be accepted for certain loans, they’ll also determine what interest rate and credit limit to give based on your credit card score. It’s not impossible for a person with a poor credit score to obtain a loan or a credit card, but their interest rate and their loan terms will be much higher and stricter than a person with a good credit score.
A credit card score of 560-619 is considered a poor score. A score of 620-674 is considered fair. A score of 675-719 is considered a good score. And a score of 720-850 is considered excellent.
The credit card score is determined by your credit card history and your debt behavior. Credit card scores poor fair good excellent takes into consideration your loans, your present and past credit, any current open lines of credit, your payment history and any history of bad debt.
FICO scores are the credit scores used by most lenders. There are three FICO scores, each from different credit card bureaus: Experiean, Equfax and TransUnion. Each of these credit bureaus keeps a credit file on you. The three scores are added together to determine if your credit scores are poor fair good or excellent.
Your credit scores will change along with your credit history. It’s important to take the steps to improve your credit score so that you can qualify for better rates and maintain a good credit reputation.
Tags: determining credit scores poor, excellent credit scores, fair credit scores, good credit scores, poor credit scores
