So, now I've completed Class 5 which discusses the ugliness of credit and the credit score.

I think the biggest "light bulb" I got was when Dave did a pie chart showing what our credit score is made up of. It's all based on debt! It has nothing to do with our income, positive cashflow just DEBT! So, if you have no credit score you have no debt!

Enough said.

Actually, not enough said. I have much more!  Alot of people are unsure about how their credit score gets to be a certain number or how to improve it, or WORSE, how it got so bad? How do you "lose points" or gain them? Here's some info on Credit Scoring and how it works.

~Credit scores (aka FICO scores) are numbers that are assigned to you based on your credit history.

~Usually, your credit scores start around the 300 point range and go all the way to 850. These points are then separated into point groups as follows:
720 - 850
700 - 719
675 - 699
620 - 674
560 - 619
500 - 559

These groups are used by all the major credit card issuers, auto finance companies, and mortgage companies.

~Anything under a 500 will usually be declined credit, or you will be stuck paying ridiculously high interest rates!

TIPS ON IMPROVING YOUR CREDIT SCORE

Open up a savings account...Even if you can only put a little bit of moneyin there to start with, it can add 30-40 points onto your credit score. 

Pay your bills on time. 35% of your credit score is base on payment history The more frequent you pay your bills on time, the more your score will improve!

Leave about a 50% balance on any credit cards you have! This will also help. It shows responsiblity! BUT don't open up a bunch of credit cards, because that will throw up all sorts of red flags!

Lastly, make sure you check your credit report every so often. People do make mistakes, you know! And there are times when you will see errors on your credit report. Make sure to correct them!

Dependent on which agency is calculating your score, (Experian, Equifax, and TransUnion) there can be a difference between having a 620 or 650! Each agency can report different types of information, so there are slight differences in scores. Usually, your score will be the average of the 3 scores, or you take the middle score out of the three! 

The only way to make sure every detail on your credit report is true is by checking it annually or bi-annually. Too many inquiries are not good, though..It will lower your score every time you check so do go overboard!!!!

And as always, if you want more info, I'm always just a call (843.452-6670) or click away!

~Karla

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