How To Improve Your Credit Score Fast

Do you have a credit score that is not so impressive or a credit history that must improve? If you don’t have a copy yet, you can get your credit report and score for free. Credit scores dictate how our financial lives go. It could even go as far as saving us thousands of dollars. A good credit score can get you the best payment terms and interest rates in loans. In fact a discrepancy of 4% in interest rates is what separates an excellent credit score from a risky one.

So how do you improve your credit score quick? Unfortunately, there is no quick fix here. The fastest that How To Improve Your Credit Score Fastyou’ll see a difference is a month and that won’t even be a dramatic change. You see, credit reports and scores is a compilation of your credit history so no matter how well you do now, a not so ideal past will not be erased unless it occurred seven years ago. Improving your credit score is not an instant fix. It will take practice and habit.

Below is a list on how to improve your credit score fast at least as fast as possible.

  1. Credit balance and credit limit ratio

If your credit card limit is $10,000 and your credit balance is $8,000, this is one of the factors that is bringing your score down. The less of your credit limit that you use up, the better. If you can, bring your balance down to 10% of your limit. If you have gotten a credit increase recently, make sure that your credit report is updated too.

2. Pay it off

Along with your credit card, do you have other existing credit such as loans? Having a big credit is affecting your score so pay it down. If you can, it would even be best to pay it all off.

3. Check for errors

Errors in the credit report are quite common. Make sure that no error is on your report because it just might be dragging your score down. Make sure the credit limits, the payment dates and all other figures are correct. Unfavorable credit activities that you did not make yourself should not be affecting your record so be sure to request a credit report dispute. This is also the time to detect identity fraud and stop it before it escalates.

4. Pay on time

Your efficiency in paying your bills takes up the most percentage in your credit score. It accounts for 35% of the overall score. So if you have missed payments in the past, your credit score will inevitably be affected. Make sure that this does not happen again. If your credit report shows a late payment when you actually paid for it in time, take all necessary actions to fix any inaccuracies.

5. Keep it active

Do you have a credit card that you have had for years that you no longer use? Do not ever think of getting rid of it because keeping a credit card can help improve your credit score. It would do your credit score good if you keep that credit card active. You do not necessarily have to make big purchases to do that, small items that you can pay in full at the end of the month is ideal.

 

 

 

What Is My Credit Score Free, Question Answered

What is my credit score free? That is the same questions that thousands of other Americans are asking. You can get a free credit report from the three major credit reporting bureaus once a year, thanks to the Fair and Accurate Transactions, FACT Act, but not a free credit score. The only way to get a free credit score from the government authorized unit is when you applied for a loan, for example, and have been rejected because of your credit report or score. You then have a right to ask the lender for a copy of the report and score that they used for reference. But that seems too far for getting a free credit score.

What is my credit score free?

One more way to get a free credit score is through websites that are not government authorized. They are not What Is My Credit Score Freerisky as long as you know how to safely get your free credit score and are careful in choosing the right website. There are a few trusted and well-reputed websites that can give you a free credit score. Choose one that does not require credit card details to avail of their free trial.

There have been numerous cases where individuals singed-up for a free trial and gave their credit card information but were charged for the service a couple of months later. What happened was that, upon signing up, they unknowingly agreed to be charged regular service rates after the free trial and they did not unsubscribe when it was over. If you do give out your credit card details, be extra cautious to cancel your subscription before the trial period expires.

What’s a good score?

A good credit score is anywhere above 660. Getting a score between 660 and 719 will give you fair rates when you are applying for a loan and will show that you are responsible enough financially. The best loan rates and payment terms are offered to those with a credit score of 720 and up. Anywhere below 660 can send a red flag though. You will be considered to be of high risk and will either be given unfavorable rates and terms or rejected for a loan, insurance, job or an apartment.

Why do credit scores differ?

Have you checked your credit scores recently? Have you compared two of your credit scores from different agencies or bureaus? If you have, you will be surprised to find that they are not the same or at lease close enough. This is because of two reasons; one is that different agencies use different scoring models and two, not all information that is available to one agency is available to all the others.

The most common scoring model is the FICO, Fair Isaac Corporation and it is what the three major credit reporting bureaus use. This is important when choosing a free credit score service online. Narrow your search to those that use the FICO model so that your score will closely resemble your actual score at the three bureaus.

 

 

Is My Credit Score Good?

Have you gotten a free copy of your credit report and score but do not know what to make of it? Want to know what your score means? Get the answer to your question Is my credit score good?

Is my credit score good?

Your credit score shows where you stand financially and it affects your financial life more than you think or would like to admit. In fact, it can determine your ability to get a mortgage, a credit card, car and home loans, some insurance and sometimes even a job.

FICO

There are quite a number of credit scoring models available but the most widely used is the FICO or Fair Is My Credit Score GoodIsaac model. It is the model used by the three major credit reporting bureaus TransUnion, Experian and Equifax. If you purchase your credit score from these bureaus, this is the scoring model that will be used to come up with your credit score. These scores are then grouped into five ranges, excellent being the highest and risky, the lowest.

Excellent: Over 750

Very Good: 720 above

Acceptable: 660 to 720

Uncertain: 620 to 660

Risky: below 620

How is my score computed?

Below is a breakdown of how the FICO scoring method calculates your credit score. This may not apply exactly to how the credit reporting bureaus do it since they may have added a few tweaks to come up with their own. This is the original computation. The three bureaus used this computation as a general guideline but have come up with their very own versions. Experian has PLUS/Fair Isaac RISK, TransUnion uses the classic FICO Risk Scoring system and Equifax has the BEACON system.

35% – Payment history

Getting a perfect 35% in this part means you have not had any late payments nor have filed for bankruptcy. This naturally gets the highest percentage since it can give the lender, who’s checking your report, an idea on how well you pay your bills and how likely you are to pay him.

30% – Outstanding debt

The lower you have accumulated on your credit cards limit and the less you owe on loans, the higher your score will be. The general rule of thumb in this aspect is to keep your credit card balance to 10%  or less of your credit limit.

15% – Duration of credit

The longer you have had a bank account or that credit card, the higher your score is. This gets a fairly high contribution to your overall credit score since the longer history you have on a credit, the more information there is about your financial habits.

10% – New credit

Lenders who check your credit report history will be recorded and will affect your score. Because it is understandable for individuals to look around for best deals on loans, inevitably cause lenders to check your report, these inquiries will be grouped together in 45 day increments. Your own inquiry on your report will not have the same effect.

10% – Existing types of credit

It is good to have several types of credit and will boost this part of your credit score. Installment loans and revolving credit accounts included.

Where To Get Free Credit Score Government Issued

If you have already requested for your free annual credit report from the government authorized website Annual Credit Report or requested for your copy through mail or over the phone, you are wondering where to get a free credit score government authorized. Unfortunately, the FACT Act does not include a free credit score, it only entitles consumers to a free credit report. Credit scores can be purchased at $14.95 with the report at any of the major credit reporting bureaus. You can choose to get it from the official websites of Experian, Equifax or TransUnion.

Free credit score government

There are several websites that give out free credit report and score but none are acknowledged by the government. If you decide to proceed with this, make sure that you only deal with a well reputed website. There are cases of people getting charged a full year’s worth of service because they did not cancel their free subscription. What some websites do is give out a free trial for a week, sometimes a month and when the subscriber has not cancelled the subscription, they will automatically charge the person’s credit card. So ask around or research which websites deliver free credit reports and scores.

Once you have your credit score, whether you paid for it at the government authorized website or through a free service, what then? What is a good score and what is a bad score?

Good score, bad score free credit score government

If you have a score above 720, congratulate yourself. You have done an amazing job in keeping an excellent rating. This is the best possible rating one could get. It is also the rating where you can get the best interest rates and payment terms from lenders.

If you have a score of 620 or below, it is time for you to work on getting that credit score up. This score will give you the highest interest rates and the most unfavorable terms with lenders. If they even grant you that loan, in the first place.

A score in between the highest and the lowest rating will give you fair conditions with lending companies. The closer you are to 720, the lower the interest rates are and the closer you are to 620, the higher those rates will be.

What’s in a score?

If you have a low score and wish to improve it or a high credit score and wish to maintain it then you should know how scores are computed. The biggest factor in calculating a credit score is the payment history. It constitutes a big 35% of the overall score. What goes into payments history is how prompt you are in paying bills. Late payments and bankruptcies can bring this score down.

Your outstanding debt makes up 30% of your credit score. The amount that you owe in car or home loans and how much of your credit card’s credit limit you have accumulated all go into this.

15% goes into the duration of your credit and 10% each for new credit and the types of credit that you have. All this make up for your credit score.

How To Check Credit Score For Free

Credit scores show lenders, and whoever is checking your score how creditworthy you are. On your credit report, you’ll find a detailed history of your credit and the credit score is calculated using this information. Credit scores are a three digit number that ranges from mid-800, the highest rating to below 300, the lowest.

Not only are lenders the one who will assess you based on your score, job employers and potential landlords do too. If you want to know what your credit score is then read on to find out how to check credit score for free.

How to check credit score for free

There are several reputable websites that offer free credit report and score. You can sign-up for their free How To Check Credit Score For Freeservices but be sure to cancel your subscription once the free service is over. There are a lot of websites that offer free annual credit report and scores but some will automatically charge you if you have not cancelled your subscription after the free trial has lapsed, usually after a week or a month. Read the terms and conditions carefully and choose only those that others trust.

Government authorized

According to the FACT Act, Fair and Accurate Credit Transactions Act, everyone has the right to get a copy of their credit report. You may get yours at the government authorized website Annual Credit Report (www.annualcreditreport.com) once every year. When you request for your free copy, you will be getting one from Experian, TransUnion and Equifax, the three major credit reporting bureaus. This report allowed by government law does not include a credit score though. It can be purchased as an extra.

Credit-based rejection

The FACT Act also gives you the right to request for a free copy of your credit report and score when you have been rejected a loan or offer because of credit-based reasons. The lender should give you a copy of the credit report that they based their reasons on, be it TransUnion, Equifax or Experian.

Whichever method you choose to check your credit score, once you have it, do you know what it means? If you have a credit score of 720 and up, that means you have the highest rating and will be getting the loan no doubt. Not only that, you will also get the best possible repayment terms and interest rates. If you are looking into a major purchase, be sure that you have a credit score of 720 or higher.

The average rating falls between 621 and 719 although more specific ratings fall into this. This rating is the minimum required to get fair terms. Your rates and terms will not be as good as when having an excellent rating but should be fair enough. You could benefit financially by improving your credit score.

The lowest rating that you can get is a “risky” rating with a score of 620 and below. If you fall on this range, you’ll certainly want to get your credit score up to be approved for a loan. Even if you do get it, you’ll get very demanding rates and conditions that it will hardly be beneficial to you anymore.

Required Minimum Credit Score For Home Loan

Sure, anyone can apply for a home loan despite one’s credit report and score or the individual’s monthly income. But what’s important is the kind of loan and the terms that the lender will give you. All this are influenced, if not entirely dependent on your credit score. There is no definite required minimum credit score for home loan since it varies from lender to lender but the average minimum is 660. A score lower than that will not exactly reject you of a loan but your terms and rates will be less favorable than those offered if you have a credit score of 660 and above. According to the Fair Isaac Corporation, to get the most favorable loan and rates, you have to have a score of at least 760.

What’s the difference?

To be exact, there is at least a 4% discrepancy between the interest rates given to individuals with a credit score of 760 and 580. If you do the math, that can come out to be a lump sum of money. That’s why it matters to have a good credit score when applying for a loan. A score between 660 and 759 can still garner you a loan with a fairly decent rate.

3 Home loan types

There are 3 types of loans; fixed-interest mortgage, adjustable-rate mortgage and interest-only loan. The fixed-interest mortgage is where the interest rate is the same all throughout the duration of the loan. A monthly amortization fee is also fixed. The most common duration of this type of loan is a 30-year period where the rates are at its lowest.

The opposite of the fixed-interest mortgage is the adjustable-rate mortgage where the interest rates change every year. Usually, the interest rate is fixed during the first few years and after a that time period, the total outstanding amount is amortized through the remainder of the loan.

Interest-only loans are loans where you can pay only the interest rates during the first few years. The borrower is not obliged to pay part of the principal amount in fear of getting an increase in the interest rates but paying an advance may decrease it. This type of loans works very similarly to the adjustable-rate mortgage.

Aside from credit score 

While the credit score can affect the loan and rates, there are a few others that the lender takes into consideration to assess the borrower.  The proof of monthly income and monthly expenses will prove how reliable your financial situation is and a record of your assets will prove you to be low risk. Sometimes, a lender will also require collateral of these assets or a consignee.

Get the best rates

The best way for you to get the best rates is to improve your credit report and score as much as you can. Request for a free copy and check for discrepancies. False information may drag your score down. If you have any existing loans or credit, pay it down or pay it off. These actions can significantly increase you credit sore.

5 Tips On How To Get Credit Score Up

Not all of us have prime credit rating but you want to get your score up for some reason. Maybe you want to get a good rate on your home loan or you’ve been eyeing a job where the employer will take a look at your credit score. Maybe you simply didn’t find a good credit history when you got your free annual credit report.

Whatever it is, below are 5 tips on how to get credit score up.

  1. Low credit balance – If you can, reduce your credit card balance to only 10% of your credit limit. The How To Get Credit Score Upsame goes to all of your other revolving credit. The less balance you have at the end of every month, the better it is for your credit score although sometimes, whether you pay your credit card in full or partial every month does not even matter. What is reported to the three credit reporting bureaus is simply the amount that you have accumulated irregardless of the amount that you paid on your due date.
  2. Pay your bills on time – Not only is a late payment reflected on your credit report but the number of days the late payment incurred will be on your report. If your excuse is that you are always busy and sometimes oversee paying your bills, you can set-up an automatic payment method for that. That way, you are sure to have improved credit history and you don’t have to worry about due dates since your bank account will automatically pay for the bills.
  3. Check for errors – Errors naturally do appear on credit reports so be sure to check yours thoroughly to make sure that an incorrect detail is not affecting your score. Get your free credit report annually to detect discrepancies the soonest. Common errors to watch out for are late payments, unpaid balances and inaccurate credit limit. Even if the error seems to be minor, you should still contact the credit reporting bureau to dispute this.
  4. Keep good credit on your report – A lot of people call the credit reporting bureaus after they have paid off a loan asking to have that loan erased from their report. As long as it was a good credit, it is better to have it remain on your report. It will increase your score and prove that you can pay your monthly dues on time as well.
  5. All existing accounts – is your cellphone subscription history on your credit report? Are your on-time payments reflected on it? Make sure that all the bills that you pay for monthly are reflected on your credit report. Bills including cable provider, internet provider and other utilities. All these monthly payments can increase your credit score.

None of these tips will take overnight. It will take a month at least. That’s the time when all of your information will be updated on the three credit reporting bureaus. And a month of following all of these steps will do you no good either. It will require consistency for you to see results. So more than a quick fix, make these tips a habit.

Credit Report Inquiry Drops Score By 80 Points

A woman was car shopping one day, confident that she will get a good auto loan since her credit score is fair. She was surprised when she was turned though. The car agent explained that her rejection was credit-based. So she requested for a copy of her credit report and score but was even more surprised to find that her score dropped by 80 points. 80 points is a big drop that caused her rating to go from fair to bad. She couldn’t figure out what has caused it and the only possibility was that the inquiry did.

Has the car loan inquiry really caused the score to drop by 80 points? Very unlikely. There must have been something else that she was unaware of that affected the score. According to one FICO score insider, an inquiry may only cause a 5 point drop in your credit score and no more than that. In fact, inquires for auto loans, student loans and mortgages are not taken into account for the first thirty days. These inquiries are grouped in 45 day increments after the initial inquiry. But even then, they are only counted as one inquiry. So an 80 point drop is close to impossible for an auto loan inquiry.

What Is My Credit Score Free?

If you have requested your free annual credit report, you might have been surprised that your credit score was not included with it. You may have figured out by now that the annual free credit report simply does not come with the credit score and the only way to get your score is by paying for it.

What is my credit score free?

One way of getting your credit score and even credit report for free, other than your annual free report, is what is my credit score freewhen you are declined for a mortgage or loan because of your credit score. When this happens to you, you have the right to request from your creditor a copy of your credit report and score, the one that they used to decide not to grant you that loan.

But you don’t want to have to go through all that trouble to get your credit score right? After all, who wants to be declined?

One more option that you have for getting a free credit score is through a credit monitoring service. There are countless services like this online but let me inform you that none of these services are authorized by the government to give out such information. The only legit entities that can give credit report and score are the three credit reporting bureaus namely Experian, TransUnion and Equifax. Annualfreecreditreport.com is the website authorized by the government to give out your free annual credit report but then again this does not include the score. None of these legit bureaus give out free credit scores.

Should you decide to try your luck, proceed with caution. It is common for credit monitoring services to claim to give you your free credit report and score for the first month of your subscription but be warned that they will bill you the following month if you have not taken the time to cancel that subscription after the trial month.

Take note that if it claims to provide free credit report and score, it will not need your credit card information because after all, it is free and should be free.

One more thing that you should know about your credit score is that it is not the same across all bureaus and credit monitoring services. Your credit score is only as good as the information that the agency uses to compute it and their actual computation method. There are many computation methods for calculating the credit score each of the three credit report bureaus.

So, focus less on your credit score and more on your credit report. While it, too, will not be the same from all three credit bureaus, it should be the more accurate option in getting an idea on whether you have a good credit score or not. As long as what is found on your credit report is accurate and your account are in good standing, then you will most likely have a good credit score.

Can A Credit Score Affect Health Insurance?

We have always thought that our credit reports and scores can affect auto loans, homeowner’s insurances and student loans to name a few. Anything credit-based will need to request an individual’s credit report in order to decide. Recently though, Director of Public Relations Anthony Sprauve of  FICO, the credit score model that the three credit reporting bureaus use, has said that this procedure is excluded in health insurances. This has clarified all the confusion that arose when an ACA navigator mentioned in an interview that a credit check was required in health plans.

This means that when getting health insurance, no matter where, your credit history should not be a factor in the finances revolving the health plan. This clarification has provided relief for a lot of Americans as all the controversies revolving around Obamacare has increased. So of all the things that you should worry about if you do not have a very good, or even fair credit report and score, health insurance plans should be the last of them.