FICO was founded in 1956 as Fair, Isaac and Company by engineer William Fair and mathematician Earl Isaac. The company debuted its first general-purpose FICO score in 1989 and by 2005, they sold their 10 Millionth Score! Watch this short video on what the score is and why it matters.
Every day, thousands of U.S. lenders use FICO Scores to make more well-informed credit-granting decisions. But what does that mean for you? And why is it important to understand how lenders use them?
This video takes a look at what a FICO Score is and why it matters to consumers and lenders alike. Watch to learn how FICO Scores streamline the lending process, making it faster and fairer for you.
The Fastest Way To Build Or Increase Your FICO Score
Now you can see the importance of having a high FICO score! Now the next question is "How Do I Build My Score Or Increase It Higher?" The answer to that question is going to be different for some consumers as everyone has a different credit score and report. For those of you who are just starting out, I recommend getting a Credit Card. A Credit Card is the easiest way to build your credit, but you must use it properly. To understand how credit cards work, click here.
Some of you have already built your credit score but you are looking for the fastest way to increase that score. The #1 problem most consumers have is to much utilization. Utilization is calculated by your credit card balance/your credit card limit. A good utilization to have is 30% or less. For example, if your credit card has a limit of $1000 and a balance of $300, then you are in an okay position. If your balance is $600, then your score will more than likely decrease since the utilization is so high. To see the best results in your credit score and using your credit card, you must keep your utilization under 6%. Even though is close to not even using your credit card, this will improve your score like you wouldn't believe!
For more FREE credit building, increasing, and maintaining tips, be sure to join our EMAIL BLAST.
Calvin Russell Jr is a Certified FICO Professional and the CEO & Founder of Simply Professional Credit Consultation. SP Credit Consultation has helped hundreds of people increase their credit scores, qualify for homes, cars, and lower interest rates with their personal, Step-By- Step Action Plans. Contact us today to learn more or email us at info@gosimplypro.com.
Right now is the PERFECT time to purchase a home. Mortgage rates are still at an all time low and the banks are becoming more lenient on the qualifications to get a mortgage loan. Many current tenants are thinking of making the move to become home owners but, they are not quite sure it is the right time. Take a look at these signs as it may describe your current situation.
1. Your Rent Payments Are Equivalent To Mortgage Payments
This is the number one sign as this is always the tipping point for most renters. I remember when I was working one day at the dealership and I asked my customer a series of questions related to their auto loan approval. One of the questions were, "What is your current rent/mortgage payment per month?" They answered "$850!" Yes, $850!!! At the time, my wife and I were paying a little more than that for a nice apartment in a nice area. It was at that moment I began to ask myself, "Where do all of my rent payments go each month?" It was also at that moment that I decided to become qualified for a mortgage loan.
Most rent payments are extremely close to that of mortgage payment. Mortgage payments can be under $1000/month for a lot of reasons. The homeowner could have placed a nice down payment, they could have re-financed, they could be living in a low cost neighborhood, or they simply could have found a great deal on a property. Many tenants think most mortgages are between $1500-$2500 when that is not the case at all. Most residential homes for middle income americans range from $125k-$175k and could be lower depending on the state. That creates a mortgage anywhere from $800/month-$1400/month with today's mortgage rates.
You gotta love the alarm clocks that never get shut off in the morning from your neighbor. Or what about the one who always decides to wash their clothes past the allowed time notice. Or the kids who sleep in a bedroom right above yours and it seems like there is always a wrestling match on their floor. Or what about the one who always has company over to hammer a few things on the wall.......every night........if you know what I mean lol. Either way, your neighbors keep doing things that either upset you or piss you off. We didn't even discuss the major ones such as: Arguing couples, constant smoke alarms, cannibus under the door, loud music and parties, constant furniture moving, and I could go on and on! Most of the minor things we all have dealt with only because the situation is not big enough to complain to the landlord about. One thing for sure is that its easier to change what YOU CAN control vs trying to change something YOU CAN'T control.
That moment when you call your landlord about a problem you are having in your apartment that needs to be fixed..............and they said they would fix it months earlier. Or what about the so called "Free Heat" but the temperature feels like 60 degrees inside the apartment during the winter. Wait, what about the time your landlord asked you to pay rent a couple of days EARLY for no reason at all! Or maybe the time you came home and you noticed your apartment had been entered by someone else and could possibly be the landlord! Yeah, that my friend is a slumlord! Things never get fixed and complaints never get addressed. But you deal with it. Why? Because its easier to live under someone else's rules and building than your own right? With a home, you will have to maintain it yes, but at least its your home. You may have your own gas bill but at least you can control the heat to your liking. Ditch the slumlord and qualify for your own mortgage!
The Bottom Line
As a good or great tenant, I am sure you have thought about the idea of home ownership. Let these 3 signs push you in the right direction of getting that loan pre-approval. I myself know the feeling of dealing with some tenant issues of my own and also dreading the pre-approval process. Credit is a big deal and it is needed to finance a home. Be sure to visit my website and see if there is a package with your name on it.
If you are looking to purchase a home in next 1-2 years, I strongly recommend enrolling in our 12 Month Boot Camp to get you qualified and educated on the home buying process. Click Here for more information.
Calvin Russell Jr is a Certified FICO Professional and the CEO & Founder of Simply Professional Credit Consultation. SP Credit Consultation has helped hundreds of people increase their credit scores, qualify for homes, cars, and lower interest rates with their personal, Step-By- Step Action Plans. Contact us today to learn more or email us at info@gosimplypro.com.
I know you face may look like Shaq when I tell you the answer to this question. The question being "Is it possible to build your credit score with a low income?" The answer is..... ABSOLUTELY!!! With credit scores and reports, one factor that has no affect on it is your personal income. That's right! Regardless of income, you can have a high or low credit score. Of course, it would seem easier to build credit with a higher income as you can afford the payments and such, but you can also build it with a lower income. Let me explain how.
1. Getting A Credit Card
Getting a Credit Card is the easiest way to build your credit score. Why? It's really quite simple. With a credit card, you can swipe the card for everyday purchases like gas, groceries, and lunch. I say everyday purchases because these are items that with or without a credit card, you would pay for anyway. With swiping the credit card for those items instead of cash, keeping a low balance, and making the payments every month in full, it's only a matter of time before your credit score rises! There are plenty of credit cards that are specifically for people who may not have the best credit due to a low income and a few late payments. To see which one is best for you, compare them here.
2. Becoming An Authorized User On Someone Elses Great Credit
Everyone knows that person in the family who has the great credit score. They didn't just wake up with great credit. They created healthy credit building habits such as: Paying bills on time, keeping low credit card balances, keeping accounts open, and maintaining multiple accounts with high limits. These types of people are going to keep doing what they have been doing as they know it helps keep their credit score high. If you know someone like this, call them ASAP and see if they are willing to add you to one of their credit cards as an Authorized User. This means that you will receive future payment history and all account changes on your credit report every month that the primary account holder does every month. Having a card of your own that is attached to this account is optional, but the key is not to focus on having a card attached. The key is make sure that they are practicing those good habits while you are on the account. This is increase your credit score like crazy and the best part is you never have to worry about paying the bill or anything. Be sure to choose the right family member or friend as their negative activity will show on your report as well. If they are late on a payment, go over their limit, or keep a high balance, your score will be affected negatively as well. Proceed with caution.
3. Getting A Retail Credit Card
Retail Credit Cards are really easy and simple to get approved for as well. The cashier will be sure to ask you at your local Target, Wal-Mart, JCP, Kohls, Best Buy, and every other business in your neighborhood. These credit cards are easy to get because they usually give you a discount on items you would normally purchase with our without a credit card. On top of that, these credit cards really don't require a lengthy credit history or high credit score. Be sure to keep the balance low and never go over the limit.
This is an option to go but keep in mind, with a low income, your interest rate on these types of loans will be high. This means you will have high payments and more than likely pay double the amount of the loan over time. Why is this an option? Well, depending on your credit situation and whether you are in the market for an auto loan or personal loan, you will be able to quickly increase your credit score. I recommend refinancing as soon as you can once your score has increased to lower your interest rate and payment.
The Bottom Line
As you can see, there are a few ways to build a credit score with a low income. These steps are fairly easy to accomplish and will require some discipline once the account has been opened. Be sure to consult with a Certified FICO Professional if you have any questions. For more topics like this one, be sure to join our mailing list.
Calvin Russell Jr is a Certified FICO Professional and the CEO & Founder of Simply Professional Credit Consultation. SP Credit Consultation has helped hundreds of people increase their credit scores, qualify for homes, cars, and lower interest rates with their personal, Step-By- Step Action Plans. Contact us today to learn more or email us at info@gosimplypro.com.
Many consumers are looking for the best and fastest way to increase their credit score. Some people think a small personal loan or auto loan would do the trick. That would work......only if the score was high enough to achieve that along with high monthly payments. The best and fastest way to increase a low credit score has always been a Secured Credit Card. Let me show you how.
What Exactly Is A Secured Credit Card?
Secured credit cards are cards that help you establish or rebuild your credit history. Unlike prepaid cards, secured credit cards give you a credit line, and your payment activity will be reported to the major credit bureaus. Please note: before any secured card can be activated, it MUST be funded with a security deposit equal to the credit line.
Why Do I Need To Give Security Deposit?
Secured Credit Cards require a refundable security deposit because it is held as collateral for the account. Unsecured Credit Cards do not require one simply because the applicant applying for one has a higher credit score and history of paying lenders on time. The great news is that no interest is applied to the security deposit.
How Much Of A Security Deposit Will I Need?
It really depends on the card issuer and your credit worthiness. Most lenders have a ranking system that allows some consumers to pay 25% or 50% of the security deposit. Some lenders only allow 100% of limit to be fully applied from the security deposit. Average amount that is needed can be between $50-600 minimum.
How Fast Will This Increase My Score?
After receiving the card, swiping for small purchases, paying the balance in full or keeping the balance under 10% of the limit, and never being late on any monthly payments, your score will increase in less than 2-3 months. The longer you keep these good habits up, the more your score will increase over time.
Can I Still Be Declined For A Secured Credit Card?
Absolutely. As with any credit card, there are certain conditions that could cause your application for this credit card to be declined. For example—because a bank account is needed in order to fund your card, you will be declined if you don't have one.
How Can I Increase My Credit Line?
To increase your initial credit line, simply deposit more than your minimum required security deposit before your account is opened. You can raise your initial credit line by the amount of your additional deposit. You may also earn a credit line increase later based on your payment history and creditworthiness.
How Can I Find The Right Secured Credit Card For Me?
There are many Secured Credit Cards to choose from. I recommend seeing a list of them all at once and you can do that by clicking here.
The Bottom Line
As you can see, a Secured Credit Card is the fastest way to increase a super low credit score. This card is easy to get approved for and will give you an opportunity when other credit card companies won't because they don't offer this type of card. For more topics similar to this one, please join our mailing list.
Calvin Russell Jr is a Certified FICO Professional and the CEO & Founder of Simply Professional Credit Consultation. SP Credit Consultation has helped hundreds of people increase their credit scores, qualify for homes, cars, and lower interest rates with their personal, Step-By- Step Action Plans. Contact us today to learn more or email us at info@gosimplypro.com.
Alright. Its time to stop sugar coating your credit score. For months you have been trying to figure out why your score is in the 400-500 range. You ask yourself "Is There Hope?" or "Can I at least get my score to 590 or 600. I am here to tell you YES! The only way to find the solution to a problem, is to first admit that you have a problem and to point out what the problem is. Here are the 4 reasons why your credit score is still in the 400-500 range.
1. Too Many Collections On Your Report
One of the biggest mistakes you make is simply letting an account go into "Collection" status. This is when you originally owe a company money for something, they try to get a hold of you by calling and such, but they are unsuccessful at doing so. At that point, they send your account and the balance due to a Collection Agency. This can decrease your score 15-45 points and sometimes more. This is the main reason you have a 400-500 credit score.
2. Too Many Late Payments
Payment History is the most important scoring factor in the algorithm for credit scoring. 35% of what makes your credit score comes from this alone! Because of this, credit reports show the last 48 payments to lenders to show whether you pay on-time, sometimes late, or always late. Most credit reports with multiple late payments are almost guaranteed to have a score in the low 500's to mid 400's. The only way to combat this is to make more on time payments.
3. 80%-90% Of The Accounts On Your Credit Report Are Closed With Open Balances
This normally happens right before the account goes into collections. Whether you closed the account or not, most financial institutions will close the account for you due to non-payment with an open balance due. This also creates another problem.......Shorter Credit Length History. This means that all of the positive and negative activity on this account will become an non factor in 7 years from the last activity date. A short credit history is not a good sign for lenders as it doesn't show that you can manage your credit over time.
4. Public Records
Public Records are the most devastating factors on a credit report. They can affect a credit score and report so much so that this information is open to the public for free......hence the name PUBLIC RECORD! These records consists of Civil Judgments, Child Support, Bankruptcy, & Tax Liens. This information is open to the public simply because most of the require a legal or government response to complete. These can hurt your score and report for years and as much as 80-100 point decrease. The only way to combat this is to pay the amount due and see if they are willing to remove them from your credit report.
The Bottom Line
You should now be able to put together a plan to increase your score and get out of the 400-500 score bracket. Of course, some credit reports are different than others but what remains a fact is that these four factors will decrease your score dramatically and more than likely give you a low credit score. For more topics like this or to learn how you can personally increase your credit score with a personalized Success Plan, please read below.
Calvin Russell Jr is a Certified FICO Professional and the CEO & Founder of Simply Professional Credit Consultation. SP Credit Consultation has helped hundreds of people increase their credit scores, qualify for homes, cars, and lower interest rates with their personal, Step-By- Step Action Plans. Contact us today to learn more or email us at info@gosimplypro.com.
During my Credit Consultations with my clients, I always explain how credit cards work. For the most part, many of them have a general idea of they work or the basics. There is more to credit cards than people know and think. I know that there consumers out there that may not know exactly how credit cards work and I hope this will give more insight.
What Is A Credit Card?
A Credit Card is a card issued by a financial institution that allows you to make purchases and pay for them later by using a line of credit. Interest is charged based on the terms of your Card Agreement and only if you carry a balance beyond the due date of the billing cycle. Also, having a credit card in your own name is an important first step in building a good credit history, an asset for life.
How To Pay The Bill Each Month
Credit cards don't give you more money-even though you might feel like they do. What they do change is the way you pay for items you would normally buy anyway.
-Paying in full-
Lets you avoid interest charges on purchases by not carrying a balance forward to the next month. This will help save you money in the long run.
-Paying over time-
Lets you carry a balance from month to month. This is one of the main reasons people get a credit card. Sometimes you want or need to make a big purchase that you can’t pay off all at once.Keep in mind, going this route will most likely accrue interest charges on the amount that you carry over to the next month.
-Making The Minimum Payment Due Is Not A Suggestion-
Your monthly statement displays an amount labeled minimum payment due. This is not a recommended payment amount, but rather the absolute minimum you must pay and the date by which you must pay to keep your account current. If you do opt to carry a balance, it’s a good idea to minimize interest charges by paying off your balance as soon as possible. Consider doubling or tripling the minimum payment due, if you can, to pay off your balance faster. Paying more than the minimum payment due can save you a lot in interest charges.
Interest Charges and Fees
-Get to know your Annual
Percentage Rate (APR)-
Credit companies charge a fee in exchange for letting you carry balances. These
are called Interest Charges. You can avoid an Interest Charge on purchases if
you pay your balance in full each month. However, if you pay less than the full
balance, an Interest Charge will be added to your account. If you carry a
balance from month to month, Interest Charges will add up. APR is the
interest rate, calculated on a yearly basis, which you pay on balances. If you
carry a balance, the APR is the best indicator of what credit costs. The higher
the APR, the more you will pay. Some credit card companies offer lower
introductory rates for a limited period of time. Afterwards, these rates
usually go up. To calculate the rate each month, divide the APR by 12. For
example, if the APR is 18%, the monthly interest rate on carrying a balance is
1.5%. Your APR
may be tied to a specific rate of interest, such as the Prime Rate. This means
your interest rate is "variable"—it could go up or down over time. A
non-variable APR doesn't change the way a variable does. However, with advance
notice from the card company or if you default on your payments, non-variable
rates may still change at some point as permitted by law. Your rate
may also change as described in your Card Agreement or upon written notice from
the company.
Finding The Right Card For You
Choosing the best card for you depends on how you plan on using it and which benefits are the most important for you.Credit cards come with a wide array of rates, benefits and features. When shopping for a credit card, here are some things to consider:
Does it offer the best rate? Is there an annual fee?
Does it meet my spending needs?
Is it the right type of card for me?
Am I getting something back for spending on the card, such as cash-back or rewards?
Is the card widely accepted?
What features, services and security options are available?
Any good credit card should come with tools to help you manage your spending. E-mail/text message alerts, automatic bill payment and due date options are just some of the features available.
Read the fine print
Once you’ve selected a credit card, it’s important to read your Card Agreement carefully. It gives you key information about your account: the Annual Percentage Rate (APR), the monthly minimum payment formula, annual fee, if applicable, and your rights in billing disputes.If you don’t meet the terms of your Card Agreement, such as making a late payment or one that is not honored, all your APR's may automatically increase. The Bottom Line After reading this, it should be easier to understand how credit cards work. Hopefully this article provided more insight and confidence about credit cards as well. For more articles similar to this one, be sure to stay in the loop.
Calvin Russell Jr is a Certified FICO Professional and the CEO & Founder of Simply Professional Credit Consultation. SP Credit Consultation has helped hundreds of people increase their credit scores, qualify for homes, cars, and lower interest rates with their personal, Step-By- Step Action Plans. Contact us today to learn more or email us at info@gosimplypro.com.
Everyone always wants to know how to achieve the prestigious 850 and 800 scores, but we forget that in order to get to that score bracket, you must first achieve the 700 bracket. Both brackets are very similar, but I will show from experience what most 700 score holders have on their credit reports.
1. They Always Check Their Credit Scores & Reports
Most 700 score holders know what their credit score is and they check it often. Whether they check it through Myfico or Credit Karma, they have an estimate of where their score is. This is very important as they know that to maintain a 700 score, you must make 98% of your payments on time with all of your accounts on your credit report.
2. They Do Not Have Collections On Their Credit Reports
Virtually all 700 score credit reports do not have collections on them. Collections can decrease a credit score as much as 40-50 points and the higher 700 score you are, it can possibly decrease more. Since all of the accounts are paid on time every month, there is never a reason for a collection to pop up.
3. They Average 30% Or Lower Utilization On Their Credit Cards
Utilization is calculated by taking the Balance and dividing it by the limit. For example: Lets say you have a credit card limit of $900 and your balance on that card is $500. Your utilization would be 56%. This utilization is mostly in the range of 30% or less for most 700 score holders.
4. They Average A Credit Length History Of 3-7 Years
There are many ways to achieve a 700 score bracket but an average 700 score holder has had their accounts opened for an average of 3-7 years. Keep in mind, these accounts are always paid on time as well. This is a major factor as over time, most consumers close accounts because of non-usage or late payments. 700 Score Holders know that in order to stay in that bracket and above, you must not close accounts as this resets your credit length history. 5. They Average 3-5 Open Accounts With A Good Mix Most 700 credit score holders average 3-5 open accounts of different types. This means a mix of Credit Cards, Auto Loans, Personal Loans, & Department Store Credit Cards. Keep in mind, this is only an average and there are gray areas as the FICO algorithm doesn't look for everything to be a certain way, just close enough as every report is slightly different. The Bottom Line Now you know the recipe for success in achieving the 700 score bracket. Of course, these are averages of most 700 score holders. With so many factors that can affect and increase a score, there is no set way. But, following these habits and steps will put you on the path for success towards achieving the 700 score bracket. For more information or to read more topics similar to this one, please read below.
Calvin Russell Jr is a Certified FICO Professional and the CEO & Founder of Simply Professional Credit Consultation. SP Credit Consultation has helped hundreds of people increase their credit scores, qualify for homes, cars, and lower interest rates with their personal, Step-By- Step Action Plans. Contact us today to learn more or email us at info@gosimplypro.com.
