Get Free Credit Score – FICO Report

John P asked:


I have a very good credit and 20% cash down for my home.
I am planning to make an offer for a property which I liked, so during the offer does it help if I give my FICO score and how much cash I am willing to pay for the property? (lets say its 20%) of the property ?

Richard

Chris Rutherford asked:




When you’re trying to fix your bad credit, you cannot afford to make mistakes that would be difficult, if not impossible, to undo and make the credit repair process longer and harder. The following are 5 common mistakes in credit repair and how to avoid them.

1. Ignoring Collection Letters

It’s tempting when you’re hounded by collection calls, but it is a big mistake to ignore collection letters sent to you for past due bills. You should always respond back in writing within 30 days. First, you should send a validation letter, demanding the collection agency to prove they have the right to collect on the debt and the debt is really your responsibility to repay. If you ignore the collection letter, the collection agency may be entitled by law to assume the debt is valid.

2. NOT Disputing with the Credit Bureaus

When you send a validation letter to the collection agency, you should also simultaneously send a dispute letter directly to the credit bureaus (Experian, Trans Union, Equifax) as well. Make them prove that you are responsible for the debts listed. Sending this letter also preserves your rights to take legal action in the future. You should also dispute any errors you find in your credit report, as well as negative items that have expired (after 7 years, or 10 years for bankruptcies).

3. NOT Disputing in Writing

Sometimes people have the misconception that they can more effectively or easily dispute their credit online or over the phone. In fact the best way to dispute your credit report is through written letters sent by certified mail. This provides the essential documentation paper trail to prove that you did send the letters in the required time frame.

4. NOT Storing and Organizing Your Documentation

Good organization of documents and record keeping are essential to prove your case and dispute your bad credit. Keep copies of ALL documents that are sent to you and copies of documents you sent to others. Also keep a log of which documents were sent to whom and when they were sent. Some credit repair software can help you keep track of open disputes and required documentation.

5. NOT Understanding or Exercising Your Rights

Credit laws are intended to protect the consumer’s rights – that’s YOU. You have the right to know what’s in your credit report; in fact, you can get a free copy of your credit report once a year from each of the 3 credit bureaus. You also have the right to dispute any errors and demand removal of information that cannot be verified with proper documentation.

So don’t be afraid to make your creditors prove their case. Often they’ll try to make you defend yourself; instead turn the tables on them and politely but FIRMLY request they prove everything. You might just get your credit repaired quickly by avoiding these common mistakes.

Regina

Maury Lum asked:




This article covers the topic of our personal credit rating and credit history. Credit rating plays a very large role in determining eligibility for securing new credit in addition to the terms and options available. As such, it is important to understand what information the credit reporting agencies use in order to come up our credit rating and credit score so that we can do all that we can to ensure our credit score is as always as high as it can be.

Using credit and carrying debt is a normal part of our day to day lives for many of us. Credit offers an element of convenience as well as the ability to purchase goods today that we may not be able to pay for in full. However, we may be able to pay for an item over time and would not mind paying a premium (i.e. interest rate) for the benefit of enjoyment and use of the item today (e.g. house, car, furniture, electronics, etc.). The use of credit though is important to understand as when used responsibly we will start to build and establish a good credit history and credit rating. Conversely however, if credit is misused and if we become delinquent with our credit, our credit history will show an irresponsible use of credit and therefore will be reflected with a poor (i.e. low) credit rating. The goal over time is to demonstrate that we have had access to a reasonable amount of credit, used that credit responsibly over time, and have also paid back the credit as agreed over time.

During the application process for new credit (e.g. credit card, car loan, mortgage), lenders (i.e. banks) will review your credit report and credit score to check how you have managed your debts in the past. The idea here being that how you have used and managed your credit in the past will be a good indication of how you manage your debts in the future. A credit report contains information such as, previous and current trade lines (i.e. accounts), credit limits, credit balances, payments over time, and if payments have been on-time or late.

If you have not had any credit in your own name before, it is recommended to apply for a form of credit so that you can start to establish a good credit history as having no history can be an obstacle in getting and being approved for new credit. You may need to start small and slow with a low limit as a bank may be apprehensive to start you off with a high available limit when you have not had any credit before. So start small, use the credit each month and then also pay it off in full each month. Over time the institution will likely be comfortable with starting to increase your limit slowly. One other important point to note is that if you have a number of credit cards and find that you are not using some, it is recommended to permanently cancel these. Keep about two to three mainstream credit cards that make the most sense (e.g. accepted the most places, provide the best rewards or insurance coverage, have the lowest interest rate). Canceling extra credit cards helps as potential access to too much credit can work against you when looking for new credit, in addition to the risk of lost, theft, and fraud.

If you think you have had a “blip” in your credit history try not worry about it. What you think may have been a “blip”, may not have been. However, it is recommended to review your credit report each year just to make sure everything is reporting to it correctly. Examples of potential “blips” that can be hurting your credit score may include: late payments, not making the minimum payment required, going over your limit if even by $1.00, an outstanding collection, etc. If you have a “blip” on your credit report it is highly recommended to correct it as soon as possible as until it is rectified it can severely negatively impact both your credit score and your ability to secure new credit. So, if you have a problem in your credit report you will need to consider how much it is worth to you to fight and or ignore the problem vs. simply fixing it right away (e.g. an outstanding collection you do not want to pay). Also, all information, good and bad, is kept as part of our credit report for seven (7) years before it falls off. As such it is best not to have negative information report to our bureau in the first place but if it does, try to minimize it and resolve it as soon as possible.

One final note is to treat all credit carefully and plan any purchase where you will use credit carefully. Any lending institution will not want total outstanding debt and monthly payment obligations to exceed a specified amount, largely based on household income. So before taking on new credit think out into the future on any other credit you may be needing or want to apply for as taking on credit today could mean you may not be able to be approved down the road for another form of credit (e.g. get a car loan today that may create to large of an monthly obligation to also be approved for the mortgage you want in 3-6 months from now).

Meet and consult with an Accredited Mortgage Professional (AMP) regarding your credit report as we can always be a good resource and starting point to provide the information and help needed.

Margaret

Earnest Young asked:




FICO credit Score now has a new system in place that will not penalize persons who missed one or two monthly payments to their creditors. However, if consumers continue to make late payments, their credit scores would decrease. One’s credit is determined by 35% of their payment history, 30% of the amount one currently owes and the amount of new accounts the individual has activated.

With this new system one would be able to apply for more credit without the hassle of worrying about their credit scores being lowered due to their bad existing credit. This system seeks to eliminate bad credit scores that may have being a result of a loved-one negligence.

Your credit score is used by lending institutions to determine whether the consumer/customer would make payments on time. With a low credit score the higher will be your interest rate payments whether it maybe for a car loan, mortgage payments or any other payments.

All lending institutions make their interest rates higher for persons with poor credit scores to makeup for the increased risk of default. In recent years the number of American with defaults have increased therefore, the lending agencies are holding back on lending funds as they once have in the past.

In the past, the more accounts one opened affected their credit scores, especially when payments are late. Now with this new credit system the number of accounts one opens would have no affect on their credit score as it did in the past. Another, change with FICO is a child that is listed as an authorized user of their parents credit cards can no longer benefit from their parents payment history. The new credit system however, will look at a child’s joint credit account with their parents.

Benjamin

Tony Banks asked:




It is important for us to know that your credit score plays a major role in your home buying process. Lenders use your credit score to determine the risk of granting you a mortgage and to determine your interest rate. Your credit score is used to determine risk. They are calculated by putting your data from your credit report into software from Fair Isaac and Company that analyzes it and gives a number. The three major credit reporting agencies might have different scores because they use different software to calculate the scores.

In summary, your credit score calculation is based on 35% of your payment history, 30% of your credit account balance,15% of the age of your credit history, 10% of the type of credit and 10% of new credit obtained.

Your payment history includes the number of account paid, negative public records or collections and your delinquent accounts. Your delinquent accounts will show the number of past due items, how long those items were past due and how long since your last payment on them.

Your credit account balance will include how much you owe on accounts and the type of account with balances. It shows how much revolving credit you have used. FICO will look for ways you have overextended your revolving credit account. They weigh the amount you owe on your installment account and measure it with your original balances to make sure you are paying them on time and consistently. They will also take into consideration the number of your zero balance accounts.

Your credit history is measured by the total length of time tracked by your credit report. They take into account the length of time the accounts have been opened. They also review the last activity you made on the account in question. Take note that the longer your good credit history is, the better your scores.

Your new credit is measured by the number of accounts you have recently opened, the ratio of new accounts opened to the total number of accounts owned, number of recent credit inquiries and the time passed since recent inquiries or newly opened accounts. Make sure you are not attempting to open too many accounts because it might lower your score.

Angela

mikek4re asked:

Mike King discusses some of the areas that can negatively impact your FICO score and the specific amount of how much each category can drop you score.

Derek

Unique asked:


I have a 629 fico and trying to get a heloc/line of credit, could someone let me know what bank will do this please?

Bonnie

Jonathan Andrew asked:




You may have heard of a FICO score, but if it didn’t relate to any of your favorite sports, forgotten all about it. But if you have ever taken out a formal loan, you have your very own FICO credit score, which will let future lenders know how much of a risk they will be taking by lending money to you. A low score will label you as a high-risk borrower, and if you have one and want to refinance your home, you can expect to be hit with a high interest rate.

But you can take matters into your own hands when it comes to raising your credit score. If you wait to apply for refinance loans until it is improved, you will save a considerable amount of money over the life of your refinance loan. How can you begin the process of lifting your FICO credit score and lowering your refinance loan rates?

The Fair Isaac Corporation is the mysterious entity behind the FICO anagram, and the company actually responsible for assigning your score. They base your score on all the details of your credit history, and then assign a numerical score representing your creditworthiness.

How Your FICO Score Is Assigned

Fair Isaac gets your credit information form the three major credit reporting bureaus, Experian, Trans Union, and Equifax. They will assign you three different scores because the information form each of the credit bureaus will be slightly different. The first thing you should do before applying for a refinance loan is get copies of three of your credit reports and scores. An error in any one of your reports could lead to an unjustified lowering of your score, and you should take the steps to repair the damage.

Your credit scores will also reflect the amount of time you have been a debtor, how much of your existing credit lines you have used, and whether any of your accounts have been turned over to collection agencies or written off.

If you uncover any errors in any of your credit reports, you should immediately send a separate letter for each of the mistakes to the credit bureau/s involved, and include documentation to support your complaint. The credit agencies will review your information, and if they agree that there are mistakes, will correct your reports and adjust your scores. Cleaning up your credit reports is essential before applying for your refinancing.

Other FICO Score Raising Options

There are other things you can do to raise your Fair Isaac and Co(FICO) scores, but they will take some time. You can begin immediately to make your bill payments on time; you can cut back on your credit card use; and you can pay off and close as many accounts as possible. The most important of these suggestions is to begin paying your bills on time, because 35% of your FICO score is calculated from your payment history.

You should try to pay down as much as you on any credit cards which are approaching their limits, because that will also make a significant improvement in your FICO score. It may take six months or longer for all the changes in your bill handling to be reflected with a better score, so don’t start until you are ready to see the effort through.

Cory

Jeff asked:


Do rich people have high FICO scores?
Are people with high FICO scores necessarily rich?
Are there poor people with great credit?
What I’m getting at is If a person works toward the goal of a high FICO score, will that get him rich?

Arlene

Rachel L asked:


There is one negative on my credit report. It has gone to collections and collections agent will take a 20% discount but it shows up on the report as a settlement as opposed to paying the whole thing; then it will show on my credit report as a paid collection. Will that really affect my FICO score? If so, how much?

Tonya