Emilio Francisco & Associates, LLP - Attorney At Law

Credit Score

Credit Record and Credit Score are two of the most common concepts you’ll encounter while managing your debts. Used as the primary basis of your creditworthiness, these two things can greatly affect your finances and help you acquire more favorable settlement terms. Browse the following topics to find out what you can do to keep your score as positive as possible.

Reviewing Your Credit Report

Disputing Errors in Your Credit Report

Your Finances and Your Credit Score

Looking Up Your Credit Score

Improving Your Credit Score

Reviewing Your Credit Report

Your credit report is a driving factor and a main contributor to your credit score. Banks and lenders submit information to the three main credit-reporting agencies about the status of your payments, your outstanding balances, and your inquiries. All of these things can either make or break your credit score and can ultimately be a deciding factor for any pending credit card or loan application.

Making sure that your credit report is accurate and up-to-date could potentially help you improve your credit score. You can start doing this by thoroughly examining your report for errors. Check to see that your personal information is correct and that you own all open accounts in your name – your score could have been potentially hurt by someone applying for credit under your name.

Finally, be on the lookout for unfamiliar transactions or errors in reports made by your creditor. Payments that have been mistakenly reported as missed or delayed could increase your credit risk and therefore decrease your score.

Disputing Errors in Your Credit Report

Since the contents of your credit report makes up a huge chunk of your credit score, it is imperative that you make sure everything written on it is valid and correct. Typographical errors, outdated information about payments and balances, and unauthorized transactions can be a huge detriment to your score and affect all future financial inquiries and applications including insurance terms and interest rates.

The good thing is you can actually do something about it. You have two options to go about this: if you’ve found that your creditor has marked a prompt payment as unpaid or delayed, you can contact your creditor directly and dispute it along with any other errors you might find on your report. They are generally willing to look into the issue and actively help you resolve it. Or alternatively, you can call up the credit report agency and expect a reply from them within 30 days. Disputing an error in your report with the credit bureau is a lot easier than it sounds as they are required by the law to look into issues that you’ve brought to their attention.

Your Finances and Your Credit Score

There are a number of ways that your credit score can affect your finances. One of these is your standing with creditors. Aside from banks and creditors using your credit score to assess whether you are qualified for a new loan or a mortgage, your score can also dictate the rate of interest that your credit is bundled with among other things. Insurance companies also look up your credit score to determine auto insurance rates and premiums for your home insurance.

What’s probably less known to the public though is that some landlords now run credit checks on potential tenants while they work on rental agreements. If you’ve made it a point to make car payments before paying your rent, your landlord could see this in a negative light and turn you away. In the same way, a low credit score can potentially hurt your chances of landing jobs in the financial industry or in any other company that requires national security clearance.

So one of the best things you can do as part of finance management is check your credit score and look for doable ways to improve it.

Looking Up Your Credit Score

An integral part of the bigger financial picture that consumers live in is the Credit Score — a number derived from the statistical analysis of a consumer’s credit report to assess his/her credit risk. Having a high credit score can positively influence the likelihood of acquiring new loans, lower interest rates, and longer payment options.

One of the first things you might want to do before applying for a new loan or credit card then would be to check your credit score and to obtain a copy of your credit report from any of the three credit bureaus.

While there are currently several credit-scoring models being used, the three credit-reporting firms mostly use the Fair Isaac Corporation (FICO) credit score model to determine a person’s credit worthiness. Simply log on to myfico.com and get your credit score for free. Just as well, getting a copy of your credit report is easier than it sounds as the firms are required by federal law to provide each consumer with a free copy of his/her credit report every year.

Improving Your Credit Score

If you’re looking to refinance your mortgage through a new loan, you might want to find out just how well you’re doing in the eyes of credit risk analysis people. One of the foremost things that consumers forget when it comes to their credit score is that they are in control of it. What you do or what you don’t do determines how high or how low your score is.

Here are some things that you can do to improve your credit score:

  1. Check for errors and inconsistencies in your credit report. Make sure you file a dispute with either your creditor or the credit bureau as soon as you find an error.
  2. Avoid maxing out your credit. Doing so could give off the impression of a financial struggle, regardless of whether you pay the full amount monthly or not.
  3. This idea will seem a little bit off but leaving your revolving accounts open actually helps your credit score. A portion of your credit score relies on your total debt in relation to the available credit you currently have. Just make sure you actually leave the available credit untouched.