Debt Management Info Blog

posted by on Jan 6

If you are trying to do the smart thing and take a look at your recent credit report, then you may be wandering what in the world you are looking at.  Understanding your credit score can be a confusing chore and may take a while for you to read.  There are a lot of numbers and confusing literature that can confuse you if you let it. 

Understanding the Score You Receive  

A credit score is a mathematical system that consists of numerous numbers that are used to estimate your credit risk.  The most commonly used form is the FICO score.  This score is used to evaluate your worthiness for credit.  You will receive a certain amount of points based on the information contained in your credit report.  The highest score that you can receive is an 850 and the lowest is a 300.  A score of 650 or higher means that your credit is good, however there is room for improvement. 

Do Your Know Your Score?

A good place for your credit score to be is around 700.  With that score you will be extended any credit with a good rate of interest, if you were looking for a debt consolidation loan for example.  If you can work hard to get our score up to that level and try to keep it there you will put yourself in a good financial situation because you will save a ton of money in interest charges on all credit extended to you.  It is important to understand what the numbers on your credit report are before you can work to improve and control them.

How to You Get Your Credit Information? 

Everyone can obtain a copy of their credit report by simply requesting it from one or all of the three major agencies reporting credit.  Because each agency has different information on you the scores they report will not be exactly the same.

Getting Help With Your Credit Score

If your score is lower than you want it to be, you can get some help with advice about how to improve the score and keep it in good standing.  You can look online for free advice or for books and tapes on credit.  These tapes can give you good ideas for ways to improve your credit score and how to maintain a good score.  There is also credit card counseling services that you can obtain in order to get good advice for fixing your credit score yourself. 

Review Your Report on a Regular Basis 

Reviewing your credit annually is very important in your efforts to keep your credit rating as high as possible.  If there are any errors on your report you will be able to catch them quickly and notify your creditor of needed changes.

posted by on Dec 31

Every person in the USA is monitored for their credit worthiness and awarded a number that matches this effort. This number is known as the FICO score, which ranges between 500 and 850. A credit report considers a number of important factors, such as the management of credit cards and repayment of debts, among others. Based on this report, a bank will accept or reject an application for a loan or any other type of credit.

There are five major factors that go into the making of credit reports and knowing these factors will help you in adopting the right debt management principles and obtaining the best credit score possible. The factors that directly influence your credit score are: your credit history, the total credit attached to your name, the timeliness of making your payments, and the number of your accounts, either closed or opened in the near past. If you have a low score, then credit repair measures are advised. The easiest and the fastest way to repair your credit score is by showing that you can pay your bills on time.

Quick credit repair can be established in two ways, either with the proper use of credit cards and/or with the help of debt consolidation measures. Credit cards can help you accelerate the repair of your credit report in no time. You need to use them in such a way that when the bills are presented to you, you are in a position to pay the bill in full or at least two thirds of it. If you keep doing this regularly, then your credit score will rise considerably. Consolidation of your loans will also help if you find you cannot pay your bills on time. The consolidation will help you stick to a repayment schedule that is easy to follow and at the same time will merge all of your debts into one easy payment.

A credit report represents how an individual manages his or her finances. There are roughly five factors that define this credit scoring, which is expressed through the FICO score, a number ranging between 500 and 850. The average score in US is more or less around 700. This report reflects how good an individual is with debt management. Financial institutions, both formal and informal, make their decision for advancing credit on this number.

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