Many consumers are still mystified as to how credit reporting bureaus arrive at their credit scores, as it isn’t always easy to figure out those calculations. You may know scores run from 300 to 850 and if your score is high—740 or higher—you do not have to worry. Creditors won’t refuse you a car loan or student loan, landlords will be happy to rent to you, and if you are considering buying a home, your interest rate will be low. However, before embarking on securing a loan, it’s still a good idea to know your exact score in advance. You may know your credit is good, but your score can dip or rise due to some recent activities; therefore, review all three of your reports before you apply for a loan, a rental, or a job. If your score is high it will strengthen your negotiating ability.
What determines your credit score? It’s mostly based on credit card information. A high score most likely means that you have been using your cards responsibly for a long time. If you have never “maxed out” any of them but have stayed below a balance of about 30% and have never had a late payment, this will reflect favorably on your record.
If your score is below 720, in the vicinity of 500 to 600 or lower, you probably had late payments on loans, minimum payments on “maxed-out” credit cards, liens against you, or a bankruptcy. These are the most obvious items that the bureaus always include in their calculations. Their reports are detailed. Your whole credit history is there for others to look at, and this can be painful for the unsuspecting or somewhat neglectful consumer.
To avoid unpleasant surprises, ordering your free reports once a year will apprise you of any funny business that you need to address immediately. Identity theft is becoming common, and for those that have been victimized it has been a time-consuming nightmare. The sooner you know about it, the better. You don’t want to end up in a loan office being informed that your score is so low that you will be forced to pay very high interest. Or you may be refused point-blank which is very likely in today’s economic climate. Lenders want safety.
Having the reports in hand enables you to contact the bureau(s) and ask them to remove outdated or erroneous items which may help your score before you apply for a loan. Also double-check your credit card limits; they may be wrong. The bureaus will quickly update these if you let them know.
If all information in the reports is correct, and your credit score is so low that you are looking for ways to settle your debt, contact Fast Track.
Fast Track can help you establish an affordable monthly payment which is deposited in a settlement account in your name. Once you have the required funds in your settlement account, we will contact your creditors and make settlement offers. We will continue to work with them until all debts in the plan have been settled. FastTrack’s goal is to settle all debts in the plan for 40%-60% of what you owe.
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