2009 November | credit report comparison

November 22, 2009

Understanding your Credit Score

Filed under: Credit — Tags: Borrowing Money, Cellular Companies, Credit Reporting Agencies, Credit Scoring, Fair Isaac Co, Fico Score, Final Score, Harder Time, Insurance Company, Landlords, Late Payments, Low Interest Rates, Major Credit Reporting Agencies, Payment History, Risk Level — admin @ 9:41 pm

Greg Smith asked:

Do you know what your credit score is? Many people understand that they have a credit score, but they don’t really know how it is actually calculated. If you want to improve your score or maintain good credit you should know how credit scoring works.

Credit scoring is the way that lenders determine how likely you are to pay back the money you borrow. It basically represents you risk level. The lower your score, the higher a risk you are to a lender. The higher your score, the less of a risk you will default on a loan.

With good credit comes low interest rates and favorable terms. Your credit score will determine much more than interest rates. Lenders, landlords, cellular companies and even your insurance company will look at your credit score in determining whether or not to do business with you. If you have a low credit score, you may pay higher insurance premiums and have a harder time borrowing money.

You’ve probably heard of your credit score called a FICO score. This is the score based on the Fair Isaac & Co. credit scoring model. These scores are based only on the information found in your credit report. FICO is not the only type of score out there. You can have a different credit score from each of the three major credit reporting agencies. It is possible to see as much as a 50 point difference between two scoring sources.

There are five major factors that go into your credit score. They are weighted differently, so some parts appear more important than others. However, they all will affect your final score.

1. Payment History

Your payment history makes up 35% of your total credit score. Your payment history considers whether you pay your bills on time or are late making payments. It will look at the frequency of late payments and how far behind you are on payments. How many accounts do you pay on time? Have you had major credit problems or filed for bankruptcy? Paying your bills on time each month will raise your credit score.

2. Amount Owed

The amount you owe will determine 30% of your total credit score. This section looks at the total amount you owe and what types of accounts you have open. Do you have large balances on all of your accounts? How much available credit do you have in comparison to the amount you owe? How much have you paid down on your accounts since they were originally opened? Paying your accounts down responsibly and not having high balances on your credit cards can raise your score.

3. Length of Credit History

The length of your credit history will result in 15% of your credit score. The longer your credit history, the higher your score. How long you’ve had certain credit accounts open will affect your score, as well as how long it has been since you’ve used your accounts.

4. New Credit Accounts

Ten percent of your score is based on how many new credit accounts you’ve established. How many new accounts have you recently opened? How many requests for your credit have been made? How long ago where you shopping for credit? Rate shopping usually will not hurt your score if they are made within a short period of time.

5. Overall Mix of Credit

The final 10% of your credit score is based onn the mix of credit you have — credit cards, installment loans, mortgage loans, secured loans, etc. The more balanced you are, the higher your overall score in this area will be. You want to have a mix of all types of credit.

There are several ways to improve your credit score. Start by paying your bills on time. This is the one factor that will make the most impact on your credit score. Pay down your debt and limit your applications for new credit. You should also check your credit report and take the time to correct any inaccuracies.

Shirley

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November 19, 2009

Your Simple Guide on How Best to Compare Credit Cards

Filed under: Credit — Tags: Annual Percentage Rate, Balance Transfer, Balance Transfers, Best Choice, Check Charges, Comparison Search, Credit Card Comparison, Credit Cards, Credit Crunch, Due Diligence, Grace Period, Honeymoon Period, Introductory Rate, Introductory Rates, Transaction Charges — admin @ 7:02 pm

Kirby Sutton asked:

With the media filled with stories about credit card companies’ new hidden costs and interest rate hikes since the credit crunch started in ’07, the consumer needs now more than ever before to do due diligence before applying for a credit card. Picking a good card is about more than merely finding the card with the lowest purchase APR or yearly fee; depending on your situation, the card with the lowest purchase APR or annual fee might possibly not be the best choice at all. Here are the 4 crucial factors that have to be considered when doing a thorough credit card comparison search:

One: fees. There’s more to card fees than just the annual fee. Some credit card companies charge a three percent fee per balance transfer. Many cards also impose foreign-transaction charges, cash-advance costs, bank wire payment fees, and convenience-check charges. Failing to recognize these charges often leads to upsetting surprises on your monthly bills.

Two: the introductory rate. Card companies understand the character of their market. That’s the reason why they keep changing credit card offers to one-up their rivals. Many people get cards to milk special introductory rates. It’s vital to know how long these starting rates last and what the permanent rates will be after the end of the introductory “honeymoon” period comes to an end.

Three: the annual percentage rate. APR is one the commonest factors used by consumers to choose among the loads of cards available. However, it is important to recall that APR is frequently not a single number. Consumers should pay attention to not only the purchase APR, but also to the cash-advance and balance transfer APR. One can suppose that a card advertised as having a 0 percent APR for purchases offers the same percent rate for cash advances and balance transfers, but that’s usually not correct.

Four: the grace period. Many folks expect that a thirty-day grace period is automatically included with all cards. But there are some cards that come with sixty-day grace periods and others that come with grace periods of only 20 days. Ignorance of the grace period might result in delinquent payments and a weakened credit report.

Signing up for a credit card gets you into a relationship with your card issuer. When you really compare credit cards and understand the particulars of that relationship before applying, you can prevent significant surprises on your bills and eliminate unnecessary tensions from your fiscal life.

Betty

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November 13, 2009

Important Information On Your Credit Score

Filed under: Credit — Tags: Better Chance, Credit Assistance, Credit Bureaus, Credit Reporting Bureaus, Credit Score, Credit Scores, Financial Transactions, Gathering Information, Group Team, Low Interest Rates, Propensity, Public Sources, Response Group, Toll Free Numbers, Worthiness — admin @ 8:34 am

Paul Hata asked:

How do credit bureaus compute one’s credit scores? A lot of credit reporting bureaus or agencies gathers information on the subject of the debtor’s credit history or files from reliable private and public sources. They also collect data from the creditors who extended the loan to the debtor.

Accordingly, the information is clustered into five sets or categories with the corresponding percentages which reflect the importance of each category in the final computation of scores, namely: (1) Owed Amount – 30%, (2) History of Payments – 30%, (3) Duration of Credit Record – 15%, (4) Nature or Kinds of Credit Currently in Use – 10%, and lastly (5) Latest Credit Inquiries – 10%.

Generally, these credit bureaus calculate the debtor’s credit score using a three figure number which range from 300 up to 850. The higher the credit score, the better chance of acquiring low interest rates for the loan being applied for and a better opening for wealth accumulation.

The industry of credit-scoring has been generating different opinions and wide-spread reactions to the public. The consumers fear that credit-based rating or scoring will pose a negative impact or unjust rating to them and will affect their economic standing and other financial transactions.

Some credit bureaus justify their purpose of gathering information and making credit rating or scoring. For them, their work is to help lending businesses formulate efficient economic decisions.

Others create a distinction between the credit-based scores of insurance companies which predicts the loss of propensity and the credit scores which is simply to predict the worthiness of a certain person to pay.

A distinctive company should develop its own credit-base rating or scoring algorithm to serve better the consumers. Here are some of the strategies adopted in credit scoring:

1.Forming a Credit Assistance Group/Team they are the quick response group that will assist consumers calling through toll-free numbers. The public would certainly like to know the effect of credit records to their application of loans, mortgage, employment and/or insurance transactions.

Also included to the team’s responsibility is the making of reports on the personal credit insurance of the consumers. This report will show the consumer’s variable score and the comparison with the aggregate scores

In addition, the team will consider previous credit records and the possible effect of extraordinary events which resulted to low scoring.

They will help the consumers by directing or referring them to the right people who will be of much help to them in taking good care of their credit problems. They will also help in correcting errors in the credit records of the concerned consumer.

2. Revising a New Method in Credit Scoring- this simplified method uses nine variables instead of the usual sixteen. Their algorithm will compute the credit scores by designating or assigning 100 as a foundation score. From these base score, they either add or minus making the range of score from 50 up to 250. The lower the score, the more desirable it is as credit scores.

3. For those consumers with no credit records or whose credit histories are lacking, they will create a program which will specifically cater to these groups of creditors to somehow uplift their credit ratings.

With the continued research and study on the needs of the consumers, these credit scoring bureaus will truly make a difference to the lending and/or insurance world.

Kevin

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November 9, 2009

Bad Credit Loans – Borrow New Funds for your Needs

Filed under: Loans — Tags: Bad Credit Loans, Borrowings, Buying A New Car, Ccjs, Chief Attractions, Credit Score, Dearth, Employment Documents, Financial Ability, Holiday Location, Ivas, Late Payments, Loan Repayment, Repayment Plan, Wedding Expenses — admin @ 11:09 am

Peter Taylor asked:

Do not overtly worry about the payment mistakes you made in the past when you are searching for a new loan. There is no dearth of lenders in the highly competitive loan business. If you have carefully gone through aspects on how lenders approve bad credit loans then such a loan is well within your reach. The lenders allow you using the loan for whichever purpose like renovating home; buying a new car, paying for wedding expenses, going to an exotic holiday location or you can consolidate debts under the loan.

Bad credit tag is given to the borrower because of payment faults like late payments, defaults, arrears, CCJs or IVAs. So your credit score also is low, usually below 550. This indicates risks for the lenders. The first verification the lender will, therefore, make is about your financial ability to repay the loan in timely manner. Income and employment documents and bank statements are seen by the lender before approving the loan. Keep these documents ready. Take the loan repayment plan also to the lender.

Bad Credit Loans are categorized under secured or unsecured options. Providing your valued property for collateral will fetch you a secured loan with ease. Lenders usually are at fewer risks and hence the approval comes fast. Greater borrowings, depending on collateral value and larger repayment duration of 5 to 25 years are chief attractions of the loan. The loan comes at lower rate of interest, though a bit higher rate as compared to good credit. Unsecured loans are of smaller amounts and no collateral is required. You can borrow up to £25000 for 5 to 15 years. Interest rate will be higher.

Take a copy of your credit report for ensuring that it represents correct information about your payments. Before going to the lender you should know your credit score as well. If you can pay off some easy debts and wait for some months for credit score improvements then you can take the loan at better rate.

Online lenders provide bad credit loans at competitive rates and so they should be preferred over banks and financial institutions. An extensive comparison of online lenders will enable in searching for a suitable deal. Take rate quotes of the lenders for fruitful comparison. Pay off the loan in time for repairing your credit rating.

Elsie

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