Fair, Isaac & Company (FICO) gathers and compiles the data in the credit reports, and subsequently calculates a numeric score to determine your creditworthiness. These numeric rankings are known as your credit score ratings.

The majority of consumer credit companies and mortgage lenders use the FICO scores. You can visit www.myfico.com to obtain information about your FICO score. Sometimes those scores will be provided on the credit score report.

The higher the score, the better – which means you’ll be able to save money whenever you apply for a loan or mortgage. This is because you will be offered not just lower interest rates, but also more favorable payment terms if you have a higher rating. The lower your credit score, the higher interest rates you will be charged on a loan. The difference between an excellent credit score and low score can translate into hundreds or even thousands of dollars. The score also determines whether you will even be offered a loan.

Credit Score Chart

The following chart is intended to help you understand how the credit score is calculated:

Credit Score Chart

35% – Payment history has the biggest influence on your credit score. It takes into account if you are on time with your bills, any bankruptcy history or bills in collection.

30% – Your Total Amount of Debt. Your debt to income ratio is taken into account. If it’s too high, the score is lower. Amount owing on specific types of accounts. Number of accounts with balances. Proportion of credit lines used (proportion of balances to total credit limits on certain types of revolving accounts). Proportion of installment loan amounts still owing (proportion of balance to original loan amount on certain types of installment loans).

15% – Length of your credit history. If your accounts are all very new, it’s a minus.

10% – Recent credit inquiries. If you have many recent new inquiries, your score will go down.

10% – Types of Accounts you have. If you borrow from finance companies or pay day advance companies, the score goes down.

In our credit-driven society, credit scores are becoming a critical part of our daily lives – whenever you are buying a house, a car, or even going to college, oftentimes you cannot afford to do it using just the money you have in the bank. And they’ll become even more important in the future.

That is why you should make sure to review them on an annual basis, and make sure they provide as positive view of us as possible.

Read more on MyCreditScoreScale.com Blog.

If you have a good credit score, you may be feeling secure in your ability to obtain credit when you need it. However, you may find yourself in a troubling situation when you apply for a loan and get rejected based on your credit report. You may be wondering ‘what happened?’

Well, even people who always pay their bills on time can get into financial trouble if their credit report is messed up. Read up the article by Harrine Freeman

By now everyone is aware of the Vantage credit scoring system developed by the three major credit bureaus Equifax, Experian and TransUnion that grades consumers on a grading scale of A-F. I have done extensive research but have yet to find out how lenders will use this score or what lenders will choose to use the Vantage score as opposed to the FICO score. Will they be flexible in their analysis and look at the actual score or just look at the grade of A-F.? Unfortunately, no one knows for sure. For now, when applying for a loan ask the lender which credit score they are using.

I recently refinanced my home and the lender used the FICO score. Well, I recently obtained a copy of my credit report and credit scores from the three major credit bureaus, Equifax, Experian and TransUnion. I have not made any late payments in the past 10 years; therefore I expected to get the highest credit score possible or at least very close to it. My scores were 760 and above. When I ordered by Experian credit score I wanted to order a FICO score yet I only had the option of getting a Vantage score. My Experian Vantage score was 819.

Good Credit Score: Even with good credit score you can get penalized

To my surprise all of these ridiculous reasons were given why my credit scores were not higher:

1. Your report does not show real estate loans – this was incorrect, I have had a mortgage for the past 7 years.

2. Your report shows that available credit across your open revolving accounts is too low – I only have one credit card with a limit of $3,000. They are telling me that if I had more credit cards my score would be higher.

3. Your report shows that the ratio of balances to credit limits across your open revolving accounts is too high – My balance on my credit card was approximately $900 which is only 30% of the credit limit which is the suggested balance that consumers should have on their credit cards.

4. Your report shows that the time since your oldest revolving account is too short. – Wrong. I have one revolving account, my credit card which I have had for the past 10 years.

5. Your report shows one or more inquiries on file – I had one inquiry in June 2005. One inquiry in February 2006 and one in October 2006. Inquiries should be obtained no more than twice a year unless you are doing comparison shopping. I am being penalized because I had two inquiries within one year.

Well, needless to say, I wrote each credit bureau and disputed all the reasons they gave me. I received two responses back and am waiting for the last response. After I receive it I will order a copy of my credit report again to see if my scores have increased. I have struggled to find out how one obtains an 800 FICO credit score or higher. From the looks of things it doesn’t seem like that is possible anymore. Whether you have good or bad credit, the credit bureaus will find ways to make sure your credit score is not as high as it can be.

I advise everyone whether you have bad credit or good credit to order a copy of your credit report once a year, read every single line on your credit report and read all of the information provided along with your credit report. Make sure everything listed on your credit report is accurate. Even a few points on your credit score can make the difference between getting approved or getting declined and we all need those extra points. Good luck!

Harrine Freeman is a speaker, personal finance expert and the author of, “How to Get Out of Debt: Get an “A” Credit Rating for Free Using the System I’ve Used Successfully with Thousands of Clients.

She is the CEO of H.E. Freeman Enterprises, a credit repair and personal finance services company. She is a member of the American Association of Daily Money Managers, SPAWN, Toastmasters, AAUW, National Association of Women Writers and the Women Network.

For more information on how to get out of debt or to buy her book please visit http://www.hefreemanenterprises.com She can be reached via email at hfreeman@hefreemanenterprises.com.

Article Source: http://EzineArticles.com/?expert=Harrine_Freeman
http://EzineArticles.com/?Even-People-With-Good-Credit-Are-Penalized&id=571378

Read more about credit score ranges on this blog.

Ideas For Property Sellers At Any Level

In recent years, selling a property was a breeze. As long as the structure was in any kind of decent shape, you could expect offers to rain down when it hit the market. Why, it was even possible back then to close a sale before the fact – before the property ever hitting the market! Yes, those were the days of the sellers’ market, but those days are far behind us now.

The real estate market, unfortunately, has not been exactly in good shape recently. From a historical perspective it is not as hot as the last few years. So it would behoove you as a seller to learn the basic tenets of selling a piece of property and do so immediately. This is a comprehensive, yet concise list of tips to help you to this end.

Buying property is an affair of the heart. It is all about positioning your property in order to entice would-be buyers. In other words, you want to give it a good makeover. Some easy examples:

Get rid of that wildlife preserve, oh, sorry, I meant your yard.

If your landscaping isn’t that great, spend the money on new plants to make it look appealing. This means purchasing new plants, because after all, the buyer will want to envision himself/herself residing in the property.

Clean the rooftop and repair any faults such as loose shingles. Buyers and appraisers always look at roofs closely.

Be meticulous in making sure your house’s interior still has an immaculate paint job, including all nooks and crannies. Believe it or not, many potential buyers can be very anal about these things and inspect every tiny crawlspace or crevice in your property!

After taking care of the inside paint issues, move to the exterior of your property. You want to be especially vigilant about the sides of your property and behind any plants that may be poised against the walls.

Buyers will look closely at your garage – clean it up, especially the floor. Nasty oil spots take away from the appearance of your gem. A super clean driveway and garage floor is a sign of a seller that has made a major effort to maintain the property, a factor buyers will view very favorably.

Last, but not the least, use the Internet to list your property for sale. A vast majority of buyers now surf the web looking for their dream residence. People will not see your property if it is not listed.

At the end of the day, all of the above boils down to one real theme. In this case, what would YOU be on the lookout for if you were in the buyer’s shoes? Use this for your data gathering, analyze, and draw a conclusion that should tell you what exactly needs to be fixed up in your property.

Trust us for your next baton rouge custom doors project.

If you have good credit, then you will see that you can get a business loan from your bank in most cases. This loan will have interest, but it will not be as high as if you get a credit loan with a bad history of paying your bills. This is because if you are not a high risk for the lender, you have to prove it. If they do not ask you to prove it, then they are going to charge you for that convenience.

The second thing to consider is a credit loan that may be applicable if your credit score is not good. For instance, you can find a bad credit loan in most cities or right over the internet. If you have a less than perfect credit history, then you may want to try this for your new business. You will see that you can get the money you need without the hassle of an extensive credit check. However, you have to realize that a bad credit loan is going to have much higher interest than the business loan from your bank. This is because if the legal money lender is offering money at a high risk, then they are going to charge higher interest rates to make up for it.

If you are trying to get a business loan, you are going to see that the same rules apply. That is, the easier that you are able to get the money, the more you are going to have to pay for it later. If you have decent credit, then you may want to make the most of it by applying for a business loan or credit loan that is based on your good credit. You will see that most agencies will give you rewards in the form of lower interest rates when you have good credit to show them that you are not a high-risk client.

When it comes to funding your new business, you have to think about all of your options. No matter what your business is going to specialize in, you want to think clearly about what you really need and what you really want. You may decide that you want to spend lots of money on advertising right away.

You want to make sure that you know you will be able to turn a profit so that if you take out quick cash or a bad credit loan, you can pay it back with enough time to spare. This will help assure that your business stays successful and out of debt.

When you want to find a credit loan, you will see that it can be easy. You may also want some quick cash, just be aware of the interest rate!

The Difference Between Prosperity and Materialism

Before beginning the journey to financial success, it helps to comprehend the difference between prosperity and gluttony. The difference is concerned with your actions and motivations.

Before you crack open another audio book on amassing wealth for dummies, before you start praying for your lottery ticket to bear fruit and before you put your money on yet another sure-fire investment scheme, stop yourself. Ask, “What am I doing this for?”

The answer may astonish you. Most don’t search for prosperity because they want to sit around and do nothing for the rest of their lives. Being rich to be rich is not everyone’s goal or prime motivator. For the majority of people, the drive to gain financial success is based on a very real desire to eliminate financial stress from their lives.

When you’re stressed about money, you can’t relax and play with your children. You fight with your spouse. You deprive yourself of time spent with friends and family because of the cost of the gas or the dinner or the show. And you can’t give back to your community and the world around you the way you want to.

If Relieving Monetary Stress is your Goal, you have Opportunities at your Disposal

There is a road leading to success for you and it has nothing to do with a winning lottery ticket. Every one of us has happiness in their future if they just knew what to look for.

Life will always be full of tough decisions. Some people go through life pleased in knowing that the glass is half full; others spend a lifetime lamenting that it’s half-empty. The truth is there is some water in the glass. It is almost never completely full or completely empty. That would be too easy. Now your only job is to decide how you perceive that glass and follow your faith.

Call it kismet, call it the Force, call it your inner substance with keys to the cosmos. Whatever you call it, your beliefs will lead you where you want to go. The only thing standing between you and success is you.

If you found interest in this short article you may go to the Teachings of Bishop Jordan to learn more about Bishop Jordan.

If you are asking that then here are 4 reasons to invest into the stock market.

1. It Tends to Perform Well Over The Long Term

Over the long term stocks tend to go up. They usually beat other major assets like bonds and real estate.

You can do even better if you research the companies and choose the ones that are most likely to succeed. That is why one of the most common stock market tips out there is to pick companies that have good management and actually make money. This way you are putting all of yours odds on your side and will probably see some nice growth over the long term.

2. It Is Liquid

Stocks are also very liquid. There are plenty of investments out there which cannot be sold at a moment’s notice, but stocks can. While it is not generally a good idea to sell your investments, if you are in an emergency it is always nice to know you have the option.

3. You Can Make Money Through Dividends and Covered Calls

You can get some income from your stocks through dividends and by selling covered calls. These income streams can help to increase your return and may eventually pay for the stocks that you own by themselves.

4. It is Simple to Do

Simple works, people like simple. Not everyone is an expert in investing. Taking part of your paycheck and investing into the stock market on a regular basis can be a simple, yet effective way to build wealth. Once more it is a proven method, which means the chances of it making money in the future are very high.

For more reasons to invest into the stock market read this article on Why Invest Stocks.

Editor’s Note: This is a guest post that does NOT necessarily represent the opinions of our editorial team.

The 1st truly engaging point he made was that he felt wealthy first, then the cash followed, not the other way around. This fascinated me because I had always thought that it was simple for someone who’s rich to feel loaded but how does one go from not having your cash arranged to being wealthy? The answer from the person who owns, I believe at least 5 islands is “anyone can feel wealthy now” just appreciate what you have and truly concentrate on being grateful. I followed a trick by Oprah originally that has actually helped me with Edward De Bono’s tip, now I use a appreciation journal (an App on the Iphone called gratitude!) where each few days I just write down what I am grateful for that day- and reasons which explain why I am already well off.

Another quite fun tip, in brooding about cash is to have 3 pieces of paper, on the 1st one you jot down all the wonderful positive things (the white hat) you can think of that would help you to get a bit more organised financially, and all of the benefits to you and your family. On the second sheet of paper you write all of the ghastly things (the black hat) you could do if you really wanted to blow money and devastate your life. Then on the 3rd piece you could now write down the double negative, that is all of the new positive ideas that you have gained from doing this exercise!

Having the motivation to be financially organized is another thing I presumed only affluent people knew about but strangely Michelle Briggs from the Aussie Biggest Loser popped up with something interesting to point out on this topic- now I heard this 3rd hand so it might not be precisely as she announced but fundamentally she revealed that she does not awake at 4am and exercise as she thins “Yay lets go” – NO it's because it simply what she does- it is the same with wealth, being organized with cash is just what you do methodically then eventually you simply get to the point where the sustained long term effort works! Some times like the Nike slogan says you need to “just do it”!

While we are on the subject, if you simply do the 3 pieces of paper exercise mentioned above, then it's possible to get started today in your new method of considering wealth and cash.

Virginia Graham is a writer, broker at Central Coast Mortgage Brokerand finance expert who has been featured in Australia on MMM radio, channel 9, channel 7 and The Sydney Morning Herald.

Editor’s Note: This is a guest post that does NOT necessarily represent the opinions of our editorial team.

For millions of people across the nation, the possibility of foreclosure has become a harsh reality, and many are dealing with the effects foreclosure has on their credit score rating. If you are one of the people affected by the recent crisis, you may be wondering “How Will a Foreclosure Affect My Credit Score?”

How Will a Foreclosure Affect Your Credit Score?

If you are late with your mortgage payments, this will surely have an effect on your credit score rating.  This is not hard to figure out. However, you may be wondering how big an impact it will have on your score.

The exact answer to this question may not easy to find. That is why you may be interested to learn what Fair Isaac, which developed FICO scores, have to say about this.

Foreclosure Effect on Credit Score

The following are the average hit your credit score will take:

See the chart on the right to see how being late with payments affected two hypothetical borrowers.

How foreclosure impacts your credit score

30 days late: 40 – 110 points

90 days late: 70 – 135 points

Foreclosure, short sale or deed-in-lieu: 85 – 160

Bankruptcy: 130 – 240

Effect of foreclosure on credit score: To come to these figures, Fair Isaac created two hypothetical consumers, one who starts out with a score of 680 and the other with a very good score of 780.

The consumer with the 780 FICO has 10 credit accounts versus six for the 580, plus a longer credit history, lower utilization of total credit limit and no missed payments on any account. The other consumer has two slightly damaged accounts. Neither have any accounts in collection or adverse public records. In these scenarios the total decline will run about 85 points for the 680 score borrower to as much as 160 for the 780 score. Via money.cnn.

Other sources estimate the damage even higher. Some say that foreclosure will cause a credit score to drop sharply, typically by 200 to 300 points. That would drop a score of 700 — considered a ‘good credit score” — to as low as 400 — considered pretty bad. The minimum FICO score is 340.

Unfortunately, for a lot of people facing foreclosure, the mortgage isn’t the only payment that’s late. If you are also late on other payments, such as car loan payments, student loan or are late on credit card payments, your credit score rating can drop even more within a very short period of time.

However, despite the problems a poor credit score can cause, if you are faced with totally unaffordable mortgage, it’s better to deal with that right away and cut your losses quickly; instead of prolonging the problem, making it even worse.

The good news is that even though a foreclosure can remain active on your credit report for seven years and make it difficult in certain lending scenarios, your credit score is not ruined for life. If you keep all of your other credit obligations in good standing, your FICO score can begin to rebound in as little as two years. The important thing to remember is that a foreclosure is a single negative item. If you manage to keep other payments up to date, it will be much less damaging to your credit score than if you had a foreclosure in addition to defaulting on other credit obligation.

“A foreclosure is not the end of the world. Most people will see their credit scores back in the high-600 range within two to three years,” says Patrick Ritchie, author of “The Credit Road Map.” “I had a mortgage client who went through a foreclosure and chapter 7 bankruptcy and three years later had a 690 middle FICO score.” via realestate.aol.

When you reach the seven-year mark, check your credit report to make sure the credit bureaus are still not reporting the foreclosure. You may need to send them a written notice in order to have the foreclosure removed after it has expired.

Read more about credit score ranges on this blog.

If you have ever taken out a loan, applied for a credit card, filed bankruptcy, you are bound to have a credit report. Your credit report is made use of different market participants to assess your finances and consequently your financial health.

How does your credit score affect you?

There are various components that make up your credit score. They are as follows –

1. Payment history:

How well you have maintained your payment schedule makes up 35% of your credit score.

2. New credit:

If you avail new credit, it makes up 10% of the credit score. If you have been taking out many loans lately, it has a negative impact on lenders.

3. Outstanding balance:

The amount you owe makes up 30% of your credit score. You may have multiple debt accounts.

4. Different types of credit you have used:

This component makes up 10% of your credit score. It indicates the types of credit you have availed. If you have a balanced “mix” of different types of credit, it usually enhances your credit score.

5. Duration of credit history:

The length of credit score makes up 15% of your credit score. A longer credit history allows lenders to ascertain your creditworthiness.

You can assess your financial health by reviewing your credit report. Information on your credit report stays on for few years. And if you have filed bankruptcy, it stays on for a period of 7 to 10 years. Similarly, if you have faced foreclosure, the same remains in your credit report for 7 years.

One of the most important factors is you cannot remove negative information from the credit report at your own will. You may come across companies offering to remove negative information from your credit report for a fee. This is however not possible. There are no shortcuts to a debt free life and you have to work towards improving your credit rating.

The State regulators and attorney generals have been receiving innumerable complaints from consumers about debt help firms that are promising consumers to remove inaccurate information from the credit report. Similarly, there are many debt help firms that charge very high upfront fees but fail to deliver what they promise.

Read more about credit score ranges on this blog.

While there are certain things that can be done to improve your credit rankings, be aware of the various “fix my credit kits” that are mostly scams designed to take advantage of desperate people in difficult financial situation.

Myth: I can buy a kit to clean up my credit, and all my past problems will be washed away.

Truth: The only thing that can be removed – “cleaned” -  from your report are inaccuracies,so these kits are scams.

Remember this: nothing can be taken off your report unless the item is inaccurate. The Federal Fair Credit Reporting Act dictates how consumers and creditors interact with the credit bureaus. Bad credit drops off your credit report after seven years. If you have a Chapter 7 bankruptcy, it will stay there for ten years.

If you have an error to be corrected, take care of that yourself. Accurate bad credit stays on your report unless you lie. But lying for the purpose of getting money is a fraud, and you should NOT do it.

Credit-repair companies are mostly scams. The Federal Trade Commission regularly closes down these fraudulent operations. Some repair kits will tell you to dispute all bad credit and demand to have it removed, even if the item is reported accurately. Some kits even suggest you get a second identity and a new Social Security number. Do not fall a victim to such scams!

If you get a new identity, you get a brand-new credit report and lenders will not be able to find out about your past bad record. However, this is a fraud, and if you do this, you may go to jail.

5 Tips How to Improve A Bad Credit Rating

Here are 5 things that you can do to start improving your rating:

1. opening a secured credit card – where your credit limit is the amount of money you deposit into your account
2. take out an installment loan from your bank. By making the regular payments to the bank on time, you will be building good credit. To get the best rate, try credit unions and small, local banks. These institutions tend to be more competitive than larger banks.
3. piggyback on someone else’s good credit. Ask a close friend or family member to allow you to become a certified user of a credit with them
4. use store credit cards when you shop. However, be sure to pay off the balance in full each month!
5. And most of all remember to pay your bills on time!

Work on cleaning your credit report and improving your relationship with money. Over time your credit report will clean itself.

But remember, improving credit scores takes time. He said scores do not always reflect an individual’s recent spending habits as the consumer has been working to pay down debt and improve his financial standing.  Credit scores really measure what you’ve done, not what you’re doing now, so they  may not show what you’re doing now to turn the ship around.

Read more about credit score rating and credit score ranges chart.