credit score

Here are some tips about CREDIT SCORES…

The average FICO credit score is 706.

* Seeking information about your own credit score is always a soft inquiry, and won’t cost you points on your score, unlike a bank – a HARD inquiry – checking your score for a mortgage application.

*Preferably use less than 30% of your available credit each month and ideally less than 10%. Paying off your bills fully every month while fully using your credit is less effective. Raising your credit limit could help keep your percentage of utilization down.* Keeping a balance on your cards doesn’t help and could set back your financial goals, which are better served by consistently paying off credit-card debt in full.

* Closing an older credit card won’t help your score and it might actually hurt you.

* Every time you open a new credit card – or take out a loan or qualify for a mortgage – the overall average age of our credit takes a hit, and the hard inquiry subtracts more points from your credit score.

* Getting that first credit card is important to building a thicker credit file, and retail cards are often among the easiest to qualify for.* Shopping around for a mortgage getting multiple credit scores can hurt your credit, but when credit scoring companies see different lenders pulling your credit score around the same time, they bundle multiple requests as a single query. So shop different rates at the exact same time, within 14 days or less.
Late payments, collections, foreclosures and chapter 13 bankruptcies hurt your credit score for 7 years. A chapter 7 bankruptcy will hurt it for 10 years. But, with the exception of the bankruptcies, the impact of the other problems diminishes as the information ages.

* Banks typically won’t report any debit-card activity to credit-reporting companies, but choosing the credit option on your debit-card purchase means the funds could take up to 3 days to post, whereas the debit option means immediate withdrawal.

* 21% of consumers studied in 2012 found errors that resulted in modifications by the credit-reporting firms. Not all credit reports are accurate. So check your credit by regularly looking at your credit reports. You are entitled to a free copy of your credit report annually from each of the credit-reporting companies (TransUnion, Experian, and Equifax). You can request them at AnnualCreditReport.com or by calling 1-877-322-8228. (WSJ)

Tip: Increasing your Credit Line will increase your credit score by decreasing your utilization rate. Some banks require a hard pull for this (Chase, Barclays) and some only require a soft pull (American Express, Bank of America, Capital One.) Business credit cards do not report on your personal credit report.

You are entitled to a free copy of your credit report annually from each of the credit-reporting companies (TransUnion, Experian, and Equifax). You can request them at AnnualCreditReport.com or by calling 1-877-322-8228.

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