Understanding Credit...
I recently took out a personal loan with a buddy and paid off all debts except some student loans. I had collections, I mean horrible credit history. I checked my score and it went from 520 before the debts to 620 now 658. How is this possible? Am I missing something or is my credit ok. Should I appply for a mortgage to get started?
The credit score is an unpredictable monster. Zero debt is good in general yet maxed out high limits is negative. Zero balance can raise scores as high as 20 points. Lastly, your debt is across all accounts so keep the total CC debt below 50% of the card max.
Keep your friendship, repay the loan and protect your credit and use it sparingly.
Eric & Rosa
[addsig]
One of the factors influencing your FICO is % of available credit.
Since it is a ratio, you can influence it.
Say you have a CC With a 200 dollar limit. If you go wild Christmas shopping and run up 150 in CC debt, although it is a small sum to repay, you just used 75% of your available credit. This looks bad to lenders.
Also, Collections and such take time, but will get off your record eventually. 2 years, I think.
Go to ****Must Reach Freshman Investor status before posting URL's*** or ****Must Reach Freshman Investor status before posting URL's*** for more info
Quote:Also, Collections and such take time, but will get off your record eventually. 2 years, I think. 7 years from DOLA (Date of Last Activity). DOLA has a bad habit of being played with by CAs (Collection Agencies). It's the date that is 180 days after the first date you were delinquent and never got caught up again. CAs change it to whatever they want, unless you catch them and put a stop to it.
Who cares about credit. If I wait until I have good credit again it will be 7 to 10 years before I could even buy a property. Buy something somehow someway. . Just find a seller who dont want their property and is a good value and buy it. Go man do it
Good LUCK and HAPPY HOLIDAYS
Hope this helps some
Ted Jr
CASH rules but the (cheap) CREDIT is chaising it neck to neck:
What's a FICO® score? Your FICO® score is the numeric representation of your financial responsibility, based on your credit history. Based on a scale of 300 -850, there are three FICO® scores - one from each of 3 national credit bureau.
CREDIT REPORTING AGENCY FICO SCORES:
Equifax = BEACON®
Experian= Experian/Fair Isaac Risk Model
TransUnion = EMPIRICA®
Credit bureau scores are not the only scores used. Many lenders use their own scores, which often will include the FICO score as well as other information about you.
FICO score in general is an algoritam that takes in consideration points asigned to your individual account. The older the account the better the poins. The sam apply for payments on time, closed, paid in full accounts etc. FICO loves them. FICO also love mortgages. Specilay the paid one... but the trick is in relation. If you turn the money for the bank succesfuly - THEY LOVE YOU... but to get there, it will take you some time without being iresponsible like TedJr
How does it efect interes rates:
720 - 850 5.710%
700 - 719 5.835%
675 - 699 6.372%
620 - 674 7.522%
560 - 619 8.531%
500 - 559 9.289%
[addsig]