Why Credit Matters
Credit can affect everything from home loans, auto loans, rental agreements, insurance, social status, and even employment. Bad credit means higher rates on just about everything related to borrowing money. Making a plan to try to improve your credit will help save you money. It is the right and duty of every consumer to learn about credit; this allows one to make informed decisions about purchases or loans that could have an impact on one’s life.
5 Factors Affecting Credit
- Payment History
- Amounts Owed
- Length of Credit History
- Taking on More Debt
- Types of Credit in Use
Learn About Credit
How to Establish Credit
What affects your FICO
The point system used technically ranges from 0 – 999, but all or nearly all actual credit scores fall between 330 and 850.
330 – 619: Poor credit. In banker jargon, a person with a score in this range is considered a “Credit Leper.”
620 – 659: Sub-prime financing will be available to you.
660 – 720: Prime financing will be available to you.
721 – 750: Prime – x% may be available to you. That is, you may be able to get interest rates on loans that are even lower than the prime rate.
751+: Excellent credit. May allow you to get even lower prime -x% interest rates depending on the credit type you’re utilizing.
The exact calculation of the FICO score is kept secret as proprietary information, but there are some general guidelines we can apply.
Payment History: Approximately 35% of a credit score may be based on payment history. A credit score is negatively impacted if bills are paid late or if there is a history of delinquent payments listed on the credit report, including matters of public record such as bankruptcy, collection accounts, etc.
Amounts Owed: Approximately 30% of a credit score may be based upon amounts owed or other outstanding debt. A credit score can be negatively impacted if the amount owed is close to the credit limit. A low balance on two credit cards may be better than a high balance on one credit card.
Length of Credit History: Approximately 15% of a credit score may be based upon length of credit history. A credit score can be positively impacted the longer that accounts have been open, especially if they are with one financial institution. So, if you wish to start building credit, you might want to look into opening a credit account with an established bank.
Taking on More Debt: Approximately 10% of a credit score may be based upon how much new debt a consumer is incurring. A credit score may be negatively impacted if someone has recently applied for a number of new credit accounts. Promotional inquiries usually do not negatively impact a credit score.
Types of Credit in Use: Approximately 10% of a credit score may be based upon the types of credit currently in use by a consumer. A credit score is usually negatively impacted by loans from finance companies.
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10 questions before getting a secured credit card
By Pat Curry, Bankrate.com
Credit cards are a fact of life. You need one to make a hotel or plane reservation, or to rent a car, even if you plan to pay cash. Many stores require a credit card to accept your check. Responsible use of a credit card builds a good credit rating, too, marking the owner as mortgage-worthy. But people who have never had credit or need to repair a poor credit history may not qualify for a regular credit card. For them, a secured credit card may be the only way to help in building credit. If you’re in that boat, here are the answers to the top 10 questions about secured credit cards.
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Credit Reports and Services
TrustedID provides identity theft protection services that prevent thieves from stealing a victim’s identity and committing credit fraud, and it offers a $1,000,000 guarantee. TrustedID is the perfect solution for customers whose personal information has already been compromised or who want to protect themselves against credit fraud.
LifeLock offers consumers protection from identity theft and credit fraud. As an alternative to traditional credit monitoring services that alert customers after their credit information has already been compromised, LifeLock blocks access to consumers credit files before thieves can access them. They also offer helpful services to your customers such as stopping pre-approved credit offers and providing a smooth experience when trying to obtain new credit.
Identity Guard offers credit monitoring and identity theft prevention services with a wide range of identity theft protection plans available to help your customers secure their personal information, and they also provide access to credit reports and credit scores from the three major credit bureaus.
IdentityTruth provides credit monitoring and identity theft prevention services that can help protect your customers from credit fraud for less than $10 a month with a $2 million guarantee.
Privacy Matters 1-2-3
Give consumers access to their credit report and credit score for free through Privacy Matters 1-2-3. As one of the most popular consumer protection programs in the nation, Privacy Matters 1-2-3 comes with powerful credit management and monitoring tools – making it easy for your customers to keep on top of their personal credit information.
myFICO is a part of the same organization that developed the FICO Score, which is the most widely established measurement of consumer credit that is used by financial institutions and lenders today. myFICO is also a well-respected provider of credit services and information, and they offer a wide range of options including credit report and score monitoring plans as well as several packages for customers that simply want access to their credit scores and reports.
A number of government and private organizations have information about various aspects of identity theft and fraud: how it can occur, what you can do about it, and how to guard your privacy. Agencies like the Federal Bureau of Investigation, Federal Trade Commission, United States Postal Inspection Service, United States Secret Service, the Better Business Bureau, and more.
KeyPoint provides credit repair, monitoring, and other business credit services. Contact us for any inquiries about our services, or to request for a free consultation.