The FICO Score Misconceptions
There are many misconceptions about credit scores out there. There are borrowers who believe that they don't have a credit score. There are others who think that their credit scores don't really matter. These sorts of misconceptions can hurt your chances of gaining employment, obtaining preferred interest rates, and even your chances of qualifying for renting an apartment.
The truth is, of you have a bank account and you pay utility bills, then you have a credit score, and it matters more than you might think. Your credit score can be called many things such as a credit risk rating, a FICO score, a credit rating, a FICO rating, or a credit risk score. All these terms refer to the same thing: the three-digit number that lets lenders get an idea of how likely you are to repay your bills.
Every time you apply for credit, apply for a job, or even apply to some apartment complexes, your credit score is checked. Another misconception is that employers check your credit only if you apply for a job that involves handling money. The fact is that many companies use credit checking as part of their standard background checks.
Make no mistake, your credit report can be checked by anyone with a legitimate business need to do so. Your credit score is calculated based on complex formulas. Things such as your past financial responsibilities, past payment records, credit limits, credit line utilization, open and closed accounts, and public records are all considered. It provides potential lenders with a quick snapshot of your current financial state and past repayment habits.
In other words, your credit score lets lenders know quickly how much of a credit risk you are. Based on this credit score, lenders decide whether to trust you financially. They use this information to approve or decline a loan. Even if approved, your credit score can have a direct effect on the interest rates you pay. Apartment managers can use your credit score to decide whether you can be trusted to pay your rent on time. Employers can use your credit score to decide, perhaps unfairly, how you manage your life. Some employers find that if you're poor with money, you have poor organization skills and no attention to detail -- things that are a must in a corporate environment.
The problem with credit scores is that there is quite a bit of misinformation circulated about, especially through some less than scrupulous companies who claim they can help you with your credit report and credit score -- for a fee, of course.
From advertisements and suspect claims, customers sometimes come away with the idea that in order to boost their credit score, they have to pay money to a company or leave credit repair in the hands of so-called "experts." Nothing could be further from the truth. It is perfectly possible to pay down debts and boost your credit on your own, with no expensive help whatsoever. There are many free resources on the web that will enable you to do just that.
Lee has done it all in the lending business. From loan origination to processing to underwriting, even owning a mortgage company. In http://www.credit-restoration-kit.com, he exploits the secrets of the industry to help fix credit, obtain mortgages, and improve financial standing. Free articles, resources, and a blog.
MORE RESOURCES:
Dana Holding Corporation CFO to Present at 2008 Credit Suisse ... MarketWatch - will participate in the annual Credit Suisse Global Automotive Conference in New York, NY Dana will provide access to a webcast of Yost's presentation, ... Tenneco to Webcast Presentation at2008 Credit Suisse Global ... |
Be Prepared for Arguments and Snooping When Sharing Credit Card ... MarketWatch - AUSTIN, Texas, Aug 27, 2008 (BUSINESS WIRE) -- Nearly one in five people who share credit card accounts say use of the accounts has sparked arguments with ... Pay Down Your Consumer Debt |
New Arizona law on credit freezes taking effect CNNMoney.com - NEW YORK (Associated Press) - Arizona consumers are gaining a new shield from identify theft: the ability to impose low-cost freezes on their credit reports ... |
TCM Bank, NA Selects Cypress Software Systems' Mark IV to Automate ... MarketWatch - "There aren't many application processing solutions that could handle our needs, but Cypress' Mark IV offers the flexibility we require to manage credit ... |
Hawaii credit unions: $7.6B in assets Bizjournals.com, NC - Credit unions in Hawaii reported $7.6 billion in total assets in the first six months of the year ending June 30, up 6.4 percent over the previous six ... |
Group wants homebuyers to use new tax credit Atlanta Journal Constitution, USA - By touting the new $7500 refundable tax credit contained in the massive housing-stimulus bill President Bush signed last month. The credit expires July 1. ... |
S&P cuts Radian Group's counterparty credit rating CNNMoney.com - NEW YORK (Associated Press) - Credit ratings agency Standard & Poor's on Tuesday night cut the counterparty credit rating on Radian Group Inc. to junk ... S&P Downgrades Units Of Three Mortgage Insurers S&P downgrades Teekay over acquisition debt |
Dallas-area electricity customers to get a credit on their bills ... Dallas Morning News, TX - By ERIC TORBENSON / The Dallas Morning News Power customers are likely to receive a one-time credit of $12.58 from their retail electric providers thanks to ... Oncor to mail $72 million in credits to consumers Oncor Customers To Get Piece Of $72 Million Credit Oncor Begins $72 Million Payout to Consumers |
Fitch Releases US Term Credit Action Report July 2008 MarketWatch - NEW YORK, Aug 27, 2008 (BUSINESS WIRE) -- Fitch Ratings recently published its latest US Term Credit Action Report July 2008. In July 2008, Fitch issued ... Fitch Ratings Affirms ASC 1997-D5 |
 Boston Globe | Credit Crisis: Government role? Seattle Post Intelligencer - We don't like the idea of saving individual investors, but we recognize that the mortgage twins are essential for the flow of credit to ordinary homeowners. ... CREDIT CRUNCH: FDIC, BLACK LIST US BANKS UP TO 117 Credit crunch: List of at-risk US banks increases sharply as ... Credit crunch hasn’t hit bottom, FDIC says |
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