New Credit Report FAQs
Q. How do I obtain a free credit report?
A. Go to annualcreditreport.com. This is the only site that is really
free. It is free because the government requires it.
Q. How Can I learn how to raise my credit score?
A. This web site has many tips for you. If you would like additional
information, myfico.com has a credit simulator you can use if you sign
up for their service. The credit simulator can show you what improvements
your score may have for paying down debts, being on time, etc.
Q. What are lenders looking for in a customer?
A. Generally speaking a fico score over 620. Lenders rate you based on
your payment history, first and foremost. Second, how much of your available
credit are you using. Creditors prefer people who only use a small portion
of their available credit. Thirdly, creditors like accounts that are old.
A good account that is old (10 years or more, for example) shows that
you are a responsible person. Last, creditors don't like you to have too
much credit. Typically 2-3 revolving accounts is enough to establish credit.
Q. What is a good interest rate to pay on a credit card?
A. Ten to twelve percent is a good rate on a credit card. However, there
are a lot of people who get lower rates while most people pay higher rates.
Credit cards usually start you on a good rate and then find a reason to
raise the rate to a ridiculously high level. Many people get the price
jack on just one day late. It's not enough they get their $35.00 late
fee.
Q. How can I repair my credit?
A. Order a copy of your credit report and dispute any incorrect items.
Often times the credit institution will not respond to your dispute and
the item will be deleted. In some cases, if you contact the credit institution
they will agree to remove the item from your credit provided you have
paid them in full and significant time has lapsed. People will generally
work with you if you are trying to honestly pay people back and be honest.
If you are trying to get good credit without being an honest person, companies
will not work with you at all. Keep at it because it takes years to establish
good credit. In general, most people can turn their credit around pretty
well in two years.
Q. What are the most important credit strategies?
A. Don't get your options cut off. People get discouraged and just don't
pay some bills. This is the wrong way to go. If you are short on funds,
move money around to manage cash flow. The minute you start being over
30 days late credit is shut down and cash flow stops. When cash flow stops,
your "dead in the water" unless you have the income. To top
it off, people typically get late fees and charges that throw their tight
budget way off. This is the time to "put on the steam" by moving
money around, taking out another loan, or working overtime at your job.
Do not give up.
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