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THIS MONTH'S HOT TOPICS:
(updated monthly for you!!!)
"Educational credit information, to help improve your credit score"
Scores automatically improve, as one's overall credit picture gets better. That means showing a historical pattern of paying your bills on time and using credit conservatively.
Here are some suggested tips to follow:
DO:
1. Pay your bills on time. Delinquent payments and collections can have a major negative impact on your score.
2. If you have missed payments, get current and stay current. The longer you pay your bills on time, the better your score.
3. If you are having trouble making ends meet, contact your creditors or see a legitimate credit counselor. This will not improve your score immediately, but if you can begin to manage your credit and pay on time, your score will get better over time.
4. Keep balances low (1-9% util) on credit cards and other revolving credit. High outstanding debt can affect a score.
5. Pay off debt rather than move it around.
6. Re-establish your credit history if you have had problems.
7. Opening new accounts responsibly and paying them off on time will raise your score in the long term.
8. Note that it is OK to request and check your own credit file. This will not affect your score, as long as you order your credit file directly from the credit reporting agency or through an organization authorized to provide credit files to consumers (such as myFICO).
9. Apply for and open new credit accounts only as needed.
10. Have credit cards but manage them responsibly. In general, having credit cards and installment loans (and paying timely payments) will raise your score. Someone with no credit cards, for example, tends to be higher risk than someone who has managed credit cards responsibly.
DON'T:
1. Close unused credit cards as a short-term strategy to raise your score. NEVER close an open account unless it is costing you money!
2. Open a number of new credit cards that you do not need, just to increase your available credit. This approach could backfire and actually lower your score.
3. If you have been managing credit for a short time, do not open a lot of new accounts too rapidly. New accounts will lower your average account age, which will have a larger effect on your score if you do not have a lot of other credit information. Also, rapid account build-up can look risky if you are a new credit user. Do your rate shopping for a given loan within a focused period of time. FICO scores distinguish between a search for a single loan and a search for many new credit lines, in part by the length of time over which inquiries occur.
How to I dispute inaccurate info?
I recommend you dispute online. Remember to print a copy of the confirmation page.
Experian:
Transunion:
Equifax:
If derogatory information is removed, will my score increase?
It depends. It is impossible to say how important any single factor or new information is in determining your score because the importance of each factor depends on the overall information in your credit report. What is important in scoring is the mix of information, which varies from person to person and for any one person over time.
For some people, a given factor may be more important than for someone else with a different credit history. In addition, as the information in your credit report changes, so does the importance of any factor in determining your score. Some helpful tips are:
1. If there is inaccurate derogatory information on your credit report, get it corrected.
USE A GW LETTER FOR ACCURATE DEROGS SUCH AS LATES AND PAID COLLECTIONS:
2. The score evaluates derogatory information in several ways - how often, how recent and how severe. If you have a pattern (e.g. several derogatory items and late payments) of this type of behavior, removing one of these may not impact the score very much.
Be aware that:
1. Paying off a collection account, late pay or derogatory item will not remove it from your credit file. It will stay on your file for seven years along with any dollar amount associated with the past due.
ALWAYS TRY AND GET A PFD FOR UNPAID COLLECTIONS:
CRA REPORTING TIME PERIODS:
2. Closing an account does not remove it from your credit file. A closed account will still show up on your credit file, and may be considered in calculating your score.
How long will a derog stay on my reports?
(1) In general. The 7-year period referred to in paragraphs (4) and (6)(2) of subsection (a) shall begin, with respect to any delinquent account that is placed for collection (internally or by referral to a third party, whichever is earlier), charged to profit and loss, or subjected to any similar action, upon the expiration of the 180-day period beginning on the date of the commencement of the delinquency which immediately preceded the collection activity, charge to profit and loss, or similar action.
In legalese, that means that an account reports 7.5 years from the date it goes bad, period. Paying shouldn't reset it.
No derogatory information was reported on my file, why did I receive a reason code relating to derogatory data?
Delinquency or serious delinquency may be flagged on any accounts that are currently delinquent, as well as on any accounts that are currently in good standing but may indicate historical delinquency in the past e.g. going into collection status.
Evidence of current or historical delinquency may appear in the following fields:
1. The "Account Status" of the account (e.g. 30 or more days past due, chapter 13, repossession, bad debt, placed for collection, foreclosure, included in bankruptcy, etc.).
2. An indication of any "Past Due" amount.
3. The "Times Past Due" and "Previous High Status" of the account or other historical payment indicators showing previous 30, 60, 90, or 120 days delinquent status on the account, or previous derogatory status, and when it occurred.
4. Counters indicating the number of times an account has been "30 Days", "60 Days", "90 Days" or "120 Days" past due during the life of the account.
5. "Description" associated with the account, containing narrative codes (comments) attached to accounts, if they contain any comment that is categorized as a derogatory event (e.g. account placed for collection, paid by garnishment, etc.).
Note that accounts that have gone into a derogatory status but were subsequently satisfied (e.g., paid charge-off, account paid after foreclosure started) still have a derogatory event associated with them, which results in a reason code indicating derogatory data.
retrieved from www.myfico.com, September 2007 |
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