Getting The Credit You Deserve
Tip #1: Know your score
People like you and me applying for a mortgage or a car loan are nothing but a “number.” A credit score in other words. And even though you may be a fine citizen and pay just about every bill on time, the Fair Isaac algorithm for predicting credit failure may “mark” you as a poor risk using its predictive analysis. Even if you have paid your bills on time for many years, and someone else has claimed bankruptcy in the past three years, the “bankrupt” person may be the one to get the credit! It’s not fair; but to understand the system you must learn some basics.
Tip #2: Get a FREE copy of your credit report
You don’t have to pay anyone for a copy of your credit report! This central site allows you to instantly receive a free credit file disclosure, commonly called a credit report, once every 12 months from each of the nationwide consumer credit reporting companies: Equifax, Experian and TransUnion. Visit them today at www.annualcreditreport.com.
Tip #3: Just the past 18 months count the most
In today’s credit lending environment, lenders are not looking at the past seven years like before but rather are looking at the last 18 months. This could be good news or this could be bad news… If most of your mistakes are in the past, previous to the 18-month cut off, then it’s easier to qualify for credit. But if you have had a great payment history for the last 5-years, then missed a few payments in recent months, and have had a few other mistakes, its going to cost you dearly in getting the best rates, or even approved for that new loan. It is important for you to know that the past 18-months are what count the most.
Tip #4: Know your “Middle” score
More and more these days, lenders are using third party credit reporting agencies that take all three of your credit reports, merge them into one, and highlight your “middle score.” For example, if you have a 680 score on Equifax, a 720 score with TransUnion, and a 620 credit score with Experian, then 680 would be the credit score given the most attention. Most lenders look at your middle score and determine your credit risk based on that score. 620 is the cut off for being a “good” credit risk, everything below 620 has a higher risk rating and may or may not be approved for a loan. The higher the risk, the higher the interest rate.
Tip #5: Boost your credit score
Your credit score can range from 300-850. Lenders will give you a home loan or auto loan with a score of 500 and up. However, the “magic” score is considered to be 720. With a credit score above 700 the ability to get the most creative financing available is at your finger tips. Want those car loans with zero percent interest? Have a 720 credit rating. If you don’t have a 720 credit score, try for 660. A 660 credit score still is good enough to qualify for most loans, including a “no-income verification” loan, something highly sought after by self-employed people.
For more information, please contact Gabriel Avalos directly @ 800.537.8817 or online at http://www.teamavalos.com.
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ABOUT THE AUTHOR
Gabriel Avalos is Vice President of LG Capital Funding in Bellevue, Washington. His 10+ year career specialty includes credit restoration, personal finance, and personal development.