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Falling Consumer Credit Scores

Fri, 28 Aug 2009 02:32:53 +0000

It should be of no surprise the recent recession has hurt consumer big time. As individuals have lost their jobs paying bills becomes tougher and tougher. And sometimes these payments are paid late or one bill is paid over another. Moreover, as you add in the foreclosure rate, it should be of no surprise that the average American credit score is dropping.

Here is a quote from USA today that indicates falling credit scores.

From the third quarter of 2008 to the first quarter of 2009 — the latest data available — the average TransUnion credit score dropped 6 points to 651, the credit bureau says. Scores fell more dramatically in states hardest hit by the housing bust: California saw a 10-point drop, for example, and Arizona, 11.

This was actually published in May and now the effect is even larger.

Also, on the other side are the lenders who are being burned by default. Many of these loads were definitely preditory, but many were to individuals who had good credit. So the overall effect could be lenders will have higher standards when it comes to giving loans. So you now have to have an excellent credit score score to get a decent loan.

Actually it is very hard to say what the final outcome of the credit market will be. Furthermore, the overall effect on the average consumer’s credit score. With the overall unemployment having the potential of being double digits makes the idea of a positive jump in the average very slim.

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Get Positive Accounts Report

Thu, 05 Mar 2009 04:43:08 +0000

If you wondering how to raise a credit score or trying to repair your credit, the common method often discussed is to get negative information removed from your credit report or not have it any to be reported. Another less practiced method is to get positive information reported.

Your accounts are not required to report their account to all three major credit bureaus. Also, the three major credit bureaus do not share information so that leaves a potential positive account only on one credit report. Certain creditors do not even report your payment history at all.

You should ask these accounts to report to all three credit bureaus. The report does not have to report but asking might prompt them. You should only do this with an account you have religiously paid on time. There is no point requesting this with a sub par account.

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Credit Score Scale

Thu, 19 Feb 2009 04:39:10 +0000

To know where you stand with your credit score, you need to know the scale that you are graded on. But there are a thousand different credit scores, so that could potentially create 1000 different scales.

Just as an industry standardization is needed to help the commerce flow. For credit scores the most recognize scale is a three digit number ranging from 350 to 850. This is the scale used by the FICO score which is the most popular and widely used credit score today.

To make things more complication, a newer score called the VantageScore uses a completely different scale. The scores are three digit but can range from 500 to 990. Also, the VantageScore assigns you a grade as if you were in school, A through F.

The fact is this creates two different credit score scales. You should just think Metric versus English measurement. But unfortunately there is no formula to convert between the two. Most people stick to just getting a FICO score. This is a proven formula that will give you an idea where you are at with the rest of your credit scores except with the VantageScore.

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What is a Good Credit Score

Mon, 09 Feb 2009 21:02:32 +0000

To be good at anything you need to be better than average. This seems to be the rule. So what is the average credit score? Most sites I found stated around 680.

The real truth is this is just a general rating. The person who really determines if you have a good credit score will be the lender. Keep in mind, that each lender has their own guidelines they follow. So if you have a credit score of 700, lender A will give you a nice interest rate, but lender B might not give as attractive of a rate. It truly is in the eye of the lender.

Another consideration is the credit crisis the country seems to currently be in. This has made it increasingly hard to get credit. Furthermore, creditors have start to reconsider their lending guidelines making a higher score needed to get a loan.

The rule you should follow is the higher the better. Any credit score at or above 700 is a good credit score. You are better than average and should not have a hard time getting approved for a loan.

How to get a good credit score

To start on a path to a good credit score, you need to know several things.

First, how is a credit score calculated. It is a complex formula that takes several factors into account that are found on your credit report. Here is the list along with their weight:

The next part is to get a copy of all your credit reports and credit score. You want to either get a 3 in 1 credit report with a credit score or check out MyFICO to get your Fico Scores/Reports. You want all three because there are things that could be on one report but not another. Also, you want your credit score to see where you are starting and to set a goal for yourself. This is a must if you want to get a good credit score. These are not free but they are worth it considering how much money you could save by you having a good credit score.

Now that you have you credit reports, the next step is to review your credit reports and check for any mistakes. You need to dispute credit report errors. Around 70% of credit reports have errors on them and your credit reports more than likely have some. This could be one the easiest and most forgotten about ways to improve your credit score.

Next is to use what you learned about what goes into your credit score to push your score higher. One the biggest is to just pay your bills on time. This has the largest effect on your score and late payments will only drag you down. Other things like: paying down your debt, don’t apply for new credit on a regular basis, and use many different types of credit will also lead you in the right direct.

The truth is you should be trying to get not only a good credit score but an excellent one. These are scores above 750 and really have huge benefits through out your life. Check out how to get a excellent credit score.

Falling Consumer Credit Scores It should be of no surprise the recent recession has...

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