Monthly Archives: February 2013

What is the Lowest Credit Score?

What Is the Lowest Credit Score?

Although not many people think about this the absolute lowest credit score is zero (none).  Yes, there are thousands of “ghosts” out there who have no credit at all for any number of reasons that include:

  1. No permanent address
  2. No permanent income
  3. No co-writers on any loan programs
  4. No documentation of any sort

What is the Lowest Credit Score?These people are, many times, illegal aliens, who buy “Social Security” cards – usually stolen from an older victim who may not even know it is gone – and who then establish identities for themselves with their own names and just a few changes to the original Social Security document. These people also have to “find” birth certificates in case they are asked to provide that type of documentation for a driver’s license.

And, while zero is the absolute lowest credit score, if you have are a citizen and have had any sort of credit at all in your past then you may find you have another of the lowest credit scores on record of between 100 and 300. To achieve this “Hall of Fame,” you must have:

  • Walked away from huge amounts of credit card or other debt without using a Chapter 7 or Chapter 11 bankruptcy procedure. In other words, you just decided you didn’t want to pay the bills any more and walked away. You may even have remained at the same address, but chances are  you’ve taken yourself off the grid by using electronic aliases and other ways around the network of credit bloodhounds that work the byways of the Internet
  • Walked away from a car or truck will without leaving a forwarding address. Of course the car company has no choice but to repossess, but by now you don’t care.
  • Purchased a junker that’s barely running, making an initial payment, and then walking away from the monthly payments.

Then there are those who fall in the 300 to 500 area of the lowest credit scores.  These are usually poorer people who have had some trouble with their budget and have fallen behind in some payments. Generally, these folks will actually try to work with a budget consolidation house to try to rectify things, but, they don’t make enough to even meet the lowest bar that can be set so their solution is the one that others should have tried, using bankruptcy. This is the one that works most of the time for these people because they have enough pride in themselves that they do want to retain what is left of their name and they really don’t want to stick anyone else with their bills. They tried, but they just couldn’t do it. Instead, they usually find free state legal help, file the correct papers and get the protection of the courts – federal and state – from further bother with these matter and once these bankruptcies are discharged they can begin to rebuild their reputations.

Understanding Your Credit Score

Understanding Your Credit Score

When you look at your personal credit score there are some things you might want to understand about it. The first thing to understand about your credit score is that it is based on a compilation of issues that usually go back 10 years.

Anything that might affect your credit score in the last 10 years so as a series of late payments. Is included in your score and using various computerized algorithms that take into account things like late payments (they usually allow you a couple before the computer system starts systematically gnawing at your credit).

Understanding Your Credit ScoreConversely, if you successfully pay off a loan or bill or credit card, that information must appear in your credit report and the agency must update your credit score.  In what could be called “these are the times that try your soul,” you may find that it is easier for the credit agency that is making the report to continue carrying you as a late pay, when, in fact, you hare on time and paid up. That’s when you have to open a ticket with the credit reporting service, being sure to copy the paid up vendor so they will know what is going on and can take action from their end. You may also want to copy the attorney general’s consumer affairs division so that they will also know that the credit reporting agencies are up to their old habits again.

Imaging getting a call from a collection company on a bill that was paid up. Don’t think it can happen, it can and the collector just doesn’t believe you even if you fax him the first 14 pages of the paid up loan agreement and the first Book of the Bible. It’s just the credit service doesn’t make any money on you if your accounts are paid up and your credit score  should have changed.

Usually a stern letter from the attorney general is all it takes to have this fixed, but sometimes it can raise more tummy acid than not as you try to fix the mess they leave you. Unfortunately, credit reporting services are not geared to “paid up” clients so that, unless otherwise noted in very formal language and many times, they will keep you in their database, waiting for some second or third-rate collection agency to try to collect your paid up debut. If this happens, your only out is to counter sue both the collector and the agency, something neither likes.

You know, it’s funny just how a counter suit will sweeten your credit score. The best part is that since most collection houses maintain local offices in most states you can sue in your own jurisdiction and have the credit house fight the suit in your jurisdiction, even if they have to fly a team of lawyers 3,000 miles to do so. It’s a nice feeling, now, isn’t it.

Will Getting a Credit Report Lower My Credit Score

Where Should I Get My Credit Score​?

If there is one thing you will soon find, if you are looking for your credit score it is that there is no lack of outfits trying to separate you from your money. For example, how many times a day do you receive spam mail (check your spam box there’s sure to be some there) from one of the three major credit bureaus or one of their partners advertising low-cost (first -month-only) access to your complete credit history.

You can use this option for speed, but you will need to remember two things: 1. they will require your credit card number and 2. the number of days they offer you this service seems to have shrunk to the vicinity of two week, so watch the calendar carefully.

Where to Get Your Credit ScoreBetter, though, is the fact that you can obtain your credit score for free from each major credit bureau by either contacting their consumer help email line or calling their consumer line and requesting a copy  of your complete credit report.

If you suspect there may be trouble in “creditdise”  – you are late with many cards; you are hearing the traditional dinnertime calls from “Bill Green at Needleville House of Credit, we have been been asked by XYZ Co. to arrange payments on a debt of ….” They do have to tell you that you have the right to a cease and desist for a certain number of days.

It is during this time that you might want to contact one of the reputable consumer credit  consolidation firms and enter into an agreement whereby they will look at your credit portfolio – all accounts, not just credit cards – and you when authorize them to negotiate for you on your behalf so that you can cut your total credit bill by huge amounts. They will also get you your current credit score and as they work with you they will help you with regular updates.

This is not a program for the faint of heart because you must pay this bill every month or you will be in arrears to your credit consolidation program and this could be considered grounds for action so make it your business to pay the bill when it is due. Not to worry, though, because they will leave you enough money monthly to pay for food and other essentials. It’s just that they not only halt the dinner calls, but they also help you by cutting your consumer debt and raising your current credit score.

Check with the Better Business Bureau or other groups in you area as they may know of or offer similar services on a free-basis, especially if your income falls below certain guidelines. Those guidelines are pretty stringent so be sure you meet them before you ask for help and don’t try to pull a fast one on them because many times they are also related in one way or another to either the BBB or attorney general of your state and that could prove embarrassing.

How to Raise Credit Score Fast

How to Raise Credit Score Fast

A credit score is actually like water; it’s a very liquid. All it takes is the right type of action and you can raise your credit score fast. It’s actually very easy, but it does involve a few steps which include:

  1. Obtaining a current credit report from all three independent credit bureaus. This is something to which you have the right. If they try to charge you for it, fight them on it.  Many times, they will use a ploy like: “You can have (take your pick of credit bureaus) monitor your credit every day of the week for only $19.95 per month. Just fill out the information to the right and we will charge you every month so you can have an up-to-date picture of your credit.” They usually have a 30-day come-on where they say you can have a full month for just $1, that’s right $1. If you are not completely satisfied with the information you receive simply call the service department and ask them to stop the service and any money will be refunded, but we are sure….” This is your right, under federal law, so, though, they may try to charge you for it, say no and if they continue to play hardball, ask the Federal Trade Commission to look into their practices.
  2. Look closely at not only the credit score but also at any accounts that may be listed. Indeed, all of your credit accounts should be listed and you should be able to see whether you are paid up or behind.
  3. How to Raise Credit Score FastIf you find there are some discrepancies between your records and the credit report, contact their consumer line and open a complaint.
  4. Find the accounts where you may be slightly in arrears, call the vendor, and arrange to bring them up to date as quickly as possible
  5. Look for any charges that may look strange to you to make sure that no one has hijacked your identity.
  6. With all firms contacted with whom you do business, if you are still having trouble, bring in a specialist firm that will help you consolidate all of your credit into one lump sum payment every month and agree to pay that figure over a certain number of months. It may take up to 48 months to complete the program, but you will see that once you are making progress in paying down your debut your credit score should start to rocket up.

To areas where you want to pay close attention are personal lines, which don’t require any sort of collateral and which you must pay down as quickly as you can. Be sure those lines are also included in any programs you start.

As you can see, it doesn’t take long to turn your credit score around and have it rocket up, it’s just having the fortitude to stick out the program because it is not easy to live under, but the rewards in repaired credit are great.

Good Credit Scores

What is an Excellent Credit Score?

If this seems like it is a frustrating answer to your question, it is even more so to a banker because there are people with 775 or 825 credit scores who are probably poorer risks than a person who has struggled to raise his credit score to 630.

Technically, a credit score of 700 or 725 is an excellent credit score. There should be no question of the person’s creditworthiness. However, if you were to have access to the applicant’s credit history, including all facets of that history you might be surprised the the 700 is based upon items that are only in the recent past.

Good Credit ScoresIf you were to look into the more distant past, say 10 or 20 years earlier, you may find a series of defaults that have gone off the books; student loans that are in arrears and other signs of financial mismanagement that, if one were to look at it today, the excellent credit score would likely crash and burn.

On the other hand, you have the worker making $32,000 per year at one job and another $8,000 or so at a second job, while his wife is making $25,000 at a third job, who are trying to keep their loans and other financial instruments current, while, at the same time, trying to put some aside for the future and who has a raised his credit score by more than 100 points because he and his wife have made it their business to pay back their loans and keep credit use to a minimum.

Whose credit score would you consider to be the excellent credit score​ ? Would you consider the person who is making minimal payments every month on major credit card debt, as well as paying down a rather large lease on a vehicle, to be a better risk? Or, would you consider the family that is keeping all of its payments up to date, putting something aside for a rainy day, while paying down a car loan, to be the better risk?

In the long run, creditworthiness – or the ultimate ability to repay a loan – is more important than just having an excellent credit score. The person living on the edge with the many credit cards, juggling income around to make sure everyone gets something and who, rather than owning a vehicle, decides to lease a vehicle that is well above his real ability to pay off, is not as creditworthy as the family that is struggling to bring its financial house back into order after a series of setbacks.

Those setbacks could have been:

  • Long-term job loss for either spouse or both and both of whom have now found jobs where they are working to reverse the set backs
  • Medical, where a major  illness or long-term disease, has forced the family to use its savings, even to remortgage a property so they will have money to pay the bills
  • Issues with credit card debt are so easy to have because it’s very easy to pull out the “plastic” to pay for something you know you shouldn’t buy in the first place

Yes, it does take time to reverse the decline in the credit score, but it can be done and one’s credit record can be cleaned up and turned around, while our friend on the edge lives from paycheck to paycheck praying he doesn’t get the boot. So, what is an excellent credit score​ ? It’s one of those questions that can only be answered with: “It depends!”

Questions About Your Credit Score

Credit Score Related Frequently Asked Questions

Everyone has a credit score, but not everyone understands exactly what they mean, why they are important or how they can influence your daily spending and money borrowing habits.

Below you will find an assortment of frequently asked questions that people have when they are just starting to learn about their credit score.

Questions About Your Credit ScoreWhat is a FICO score?

The FICO score, which is also known as your credit score, is a number that is developed bu the Fair Isaac Corporation and helps businesses and banking / funding agencies to better understand your financial and credit history.

Why are credit scores different from each bureau?

Just like banks have different loans, checking accounts and customers, the bureaus that create and track your credit report are also different. Instead of just relying on one credit score, it’s best to have a report pulled from the top three credit score bureaus.

How is a credit score calculated?

Using five different pieces of personal information, a credit score will be determined. This information includes payment history, amount of debt, age of credit, mix of credit and credit inquiries on your account.To learn more about credit scores, how they work and how to improve yours… be sure to continue to read through our site as we have a ton of information on everything relating to credit scores.

Why don’t I have a credit score?

One of the major reasons why you probably don’t have a credit score is that you don’t have any credit history. An excellent way to build credit is to have a credit card, mortgage or loan that you can start paying against.