December 9, 2016
How to Remove Credit Inquiries – 4 Easy Steps
When you apply for loans, lenders will ask you for an up-to-date copy of your credit report given by a credit bureau. If you have applied for various credit cards, then a number of inquiries could appear on your credit report. A new credit is always associated with the higher risk, but the score is mostly not affected by the inquiries from short-term mortgage, auto, or student loan. Generally, these are considered a single inquiry and have a little impact on your scores.
Types of Credit Inquiries:
- Hard pull inquiries: It generally happens when the financial institutions, like credit card issuers or lenders, check your credit report before lending you any amount. It commonly takes place when you apply for the home, auto loans, or credit cards. The hard inquiries could possibly affect your credit score by a few points. The damage caused to your credit score basically decreases or disappears with the passing time.
- Soft pull inquiries: It occurs due to the existing creditor who pulls your credit report to verify your credit situation. It might happen without your permission, but these have no adverse effect on your credit scores.
How to remove the inquiries?
All the credit inquiries might disappear from your credit report after two or more years. But, if you do not want to wait for so long, then you might follow these steps:
- Step 1: The first thing you need to do is to find out the credit inquiries that are creating troublesome situations for you by ordering all of the three credit reports. When you get those reports, just look to the end of your credit report in order to find out the inquiries. Some of them are only promotional and never shown to the lenders. So, you don’t need to worry about it at all. Only identify the ones that supposed to be shown to the lenders. You could recognize some of them, but the others might be a mystery for you.
- Step 2: Do find the address of each credit inquirer. The Experian report would list the addresses for each. Match the reports of the Experian with the reports given by the TransUnion and Equifax by using the same address list of the Experian. If you find some of the inquirers that doesn’t appear on the Experian, but appears on either Equifax, or Trans Union, then you should call the credit bureau for their address. Once you are done with this, you could move to the next step.
- Step 3: Send letters to each creditor inquirer asking them to remove their inquiry. As according to the law, only the authorized inquiries could appear on your credit report and you could challenge them, if they don’t have the proper authority to pull your credit file.
- Step 4: Some of them might show you the documents signed by you that give them the authorization for your credit inquiry. So, read the authorization form carefully, if you find any complications, you could write back and put an argument regarding its removal. You could also threaten them to take the help of the State Banking Commission for such a deceitful and vague authorization form.
Summary: How to Remove Credit Inquiries
So, before you apply for any loan, take time to check and, if necessary, build up your credit score. A good score improves your chances for loan approvals at the best terms and rates.
August 7, 2016
Length of Credit History – Does it matter?
A credit history is an assimilation of number of accounts in your credit reports, payment history, your amount of debts, and the score that is obtained after analyzing all these details. This information is used by lenders while giving loans or selling expensive products. Lenders will be basically interested in the “length of credit history” when they evaluate the paying capacity of borrowers. By length of the credit history, it means how long you have had taken credits and where does your credit score stands currently.
What is Length of Credit History
It simply means how long you have had credit; the age of the information in your credit history. Your credit report also has an age like every other tangible asset you possess. And, that age of the credit report has a 15% impact on your overall credit score. Hence, a positive or a negative credit history may influence your credit score likewise. In the world of FICO score, the Length of Credit History has a significant impact on your total credit score. This is one area where you have very little control and it is highly imperative that you develop a thorough understanding of this concept.
How is it calculated?
By knowing how Length of Credit History is calculated, you might be able to control it at some point. Credit specialists have suggested various ways and points from time to time to calculate this in the most appropriate manner. Of all the information obtained, here is the summary of factors that play a role in the calculation of the age of credit history:
1. There of customer’s oldest credit account
2. The average age of all the credit accounts opened to date
3. The age of customer’s newest credit account
4. Length of different types of credit accounts that has been established
5. Length of different types of credit accounts that has been consistently used
Out of all these, the age of the oldest account and the average age of all the accounts used to date play a crucial role.
How you can use your length of credit history to improve your FICO score?
It all comes down to your current FICO score. In general, active and current accounts have a larger influence on your current FICO score than the older accounts. The most recent activity has a greater impact on the overall credit score. However, if you have an older account that is debt-less and still active, it will fetch you a very good score than a recently opened credit account. Having old account can be, therefore, highly beneficial when it comes to improving your credit score.
Summary: Length of Credit History
Hold on to your older accounts and think twice before closing them. With older accounts active, you can easily score high in this category.
July 27, 2016
Life after Bankruptcy – 10 Strategies to Rebuild your Credit Score
Bankruptcy inflicts financial misery on more than a million Americans every year. This is most damaging thing that can happen related to credit reports. A bankruptcy may be listed on your credit report for up to 10 years and there is a good chance your credit score will be rather low until you take the necessary steps to rebuild your credit. Rebuilding your credit score after bankruptcies is the real way to get back on a better financial path.
Take necessary steps to rebuild your credit score. But before that, it is important to understand why it is effective for creating a great financial future. While applying for car loans, credit card, the financial agency or say banks first looks at FICO score and credit history to determine the liability of applicant. If the FICO scores are amidst 700 or more, means you have good score, but if lies below, it needs rebuilding. Here are some suggestions for rebuilding FICO score after bankruptcy. Adopt these strategies to rebuild the score that all work, to some effect.
- Rebuild your credit score with a secured credit card: You may need to apply for secured credit card once come out from bankruptcy so you have the convenience of not carrying cash. With secured credit card, you make a deposit into its account and you can make charges out of it like a regular debit card.
- Keep paying non-bankruptcy accounts on time: All loans are never included in bankruptcy. Keep paying on non-bankruptcy accounts on time, as positive payments will improve your credit score. Also, keep up payments on accounts that aren’t on credit report because this could be reported later and cause downfall in credit score.
- Review the credit report: If there’s bankruptcy on your credit report, it does not mean you ignore reviewing it. Review the credit report annually and obtain a copy for any erroneous information or inconsistencies.
- Pay bills on time: Prioritize on time payment of bills and due to prevent non- essential spending. Set up reminder on calender to pay bills every month on due date.
- Do not close accounts: Closing account and swearing off all credit card is not the right action to build credit score. Rather, it reduces the amount of credit available. Therefore, it is better to keep the credit lines open.
- Avoid utilizing a large amount on your credit available: Utilization of high credit during bankruptcy signals to financial trouble. Keep your debt balance to 20% or less than the credit limit all the time, even pay of the balance in full each month.
- Make a budget and limit your expenses: Figure out what you can afford to pay every month on your debts. Your budget will help manage cash flow and prevent from racking up unnecessary debt. Know the limits on your credit card to keep your balances below them.
- Add a loan down the road: Credit loans are like secured cards, which are often small amounts and are reported as positive account as long as payment are made. Buy a vehicle that is affordable and you can pay off successfully. Your credit scores will climb without any fail.
- Paying of debt: Paying of debt on time is No.1 method for improving credit score. If you have debts then bankruptcy could not wipe out. The credit score may fall and you would not get a new credit. You could erase a bad credit history and stay under a healthy credit limit.
- Go out of guilt and shame: Many Americans battling the lingering effect of great recession. Let of the shame to go and don’t dwell on negative thoughts. Adopt the right attitude, become more disciplined and educated, not to repeat the mistake again.
Summary: Rebuild your Credit Score
These 10 suggestions will surely work to build credit after a bankruptcy. However, the most important lesson is to be patient and follow the guidelines, uninterruptedly.
April 13, 2015
What is a Good Credit Score?
You may not fully understand your credit score. When trying to get a loan, you may think, “What is a Good Credit Score?” You want to know what type of score you need to qualify for loans. You want to make sure that you are on the right track or that you know when there is a problem. If you do not know what a good credit score is, though, you cannot do this. Thankfully, it is not that hard to understand. While there are several sources for a credit score, it is all easy to understand and is quite similar.
There are several sources for a credit score, as mentioned above. One source is not the same as another source. A lender will look at these scores to determine where you stand. An important part of these scores is that their range differs, too, so the lenders are not looking for a single specific number. They all start from the low hundreds and go up to the high hundreds, but the exact starting point and ending point changes. Since it changes, what makes a good score or the line drawn for a good score is not the same for all of them.
What makes a good score is not the same for all lenders, either. Looking at a single score, the line drawn will change from lender to lender. Some have higher standards or expectations while others are more lenient when looking at credit scores. A 700 may be the minimum score required for one lender, but 600 or 650 may be the minimum for others. Since there are so many differences between lenders, you should not aim for a single number. You should attempt to make your score as good as possible so that you can gain from a high credit score. By aiming for as high of a credit score as possible, you can try to qualify for all lenders.
When thinking, “What is a Good Credit Score?” there is not a lot to consider. A good credit score is a high score. As long as the number is as high up there as possible, you will have a good score. The line drawn and the minimum and maximum scores change, but there is one constant: You should aim high. If you already have a good score, try to improve it and keep up the good work. If not, work on improving it so that your score can actually benefit you.