For 2012, Consumers’ Total Credit Scores Should Be at Least 2012

According to Carrie Coghill, Director of Consumer Education for FreeScore.com, a consumer’s 2012 New Year‘s goal should be to have his or her credit scores add up to at least 2,012.

Coghill stated, “You have three credit scores from the three major bureaus: TransUnion, Experian, and Equifax. If those scores total 2,012, you’ll have an average score of about 670, which is a solid ‘B’ and acceptable for getting loans.”

According to FreeScore.com, “Directional letter grades associated with credit scores are as follows:”

Grade* Score Range

A   741 – 850
B   641 – 740
C   541 – 640
D   451 – 540
F   300 – 450

*These are guideline-only grade ranges for scores. These grade ranges are simply directional and cannot be used as a “rule.” They are designed to help consumers better understand credit scores by translating them into rough “grade ranges.”

iSellerFINANCE will accept those C’s, D’s and F’s if they are the result of a default on their mortgage  and/or a foreclosure or sudden increase in medical bills or debt. Buying a house that fell in value and ended up being worth less than the first mortgage is punishment enough. Nobody wanted that outcome nor did they plan for it. And, given the sorry state of the healthcare industry and lack of affordability of proper health insurance shouldn’t be further punishment either. iSellerFINANCE also accepts borrowers who have recently filed bankruptcies as the result of overwhelming mortgage debt as some States pursue individuals who try and walk away from their mortgages after default.

For consumers, Coghill recommends the following dos and don’ts:

1. DO pay all bills on time, every time.

2. DO keep all financial documents. That includes bills, bank and credit card statements, receipts, canceled checks, and so on for the last several years. This documentation will help a person dispute errors on a credit report, including unauthorized charges. If a consumer ever has to deal with identity theft, this information will help as well.

3. DO get credit reports. Consumers need to review their credit report from each of the major credit bureaus, TransUnion, Experian, and Equifax.

4. DO clean up errors on a credit report. Once a consumer has their credit reports, disputing negative items is the fastest, easiest way to remove them and thereby make certain that their credit scores reflect an accurate financial history.

5. DO reduce the level of debt. Focus on paying off credit cards, both because they have high interest rates and because they affect a credit score a lot.

6. DO minimize the number of inquiries on a credit report. Single inquiries (as from new credit applications you make) won’t have a big impact, but a number of inquiries in a short time period is generally not good.

7. DO keep open old but unused credit card accounts, especially older ones. The longer the average account age and credit history, the better, so keeping old but unused accounts open can help because it shows a consumer to have a long credit history. Unused credit also improves a consumer’s ratio of used to available credit.

8. DON’T apply for or take on new revolving credit unless it is really necessary. If a consumer is already maxing out his or her available credit, new applications and additional debt may hurt a person’s finances. For example, FreeScore.com consumers ran “what-if” credit simulations and found that increasing credit on a credit card can drop a credit score by more than 50 points.

And, finally you should keep in mind that debt has a statute of limitations and you should be aware of what that statute  is in your State before agreeing to pay anything to scavenger collectors on older debt. The statute varies for differing types of debt, but depending upon the State, the debt typically expires between 3 and 6 years after the last payment has been made. You can find that out by obtaining your credit report from one of the free credit report services. Good luck.

 

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About Steve King

iPeopleFINANCE™ Chief Operating Officer. Former CEO of Endymion Systems, Inc. a $36m Information Systems Services company. Co-founder of the Cambridge Systems Group, the creator of ACF2, the leading IBM Mainframe Data Center Security product; acquired by Computer Associates. IBM, seeCommerce, marchFIRST, Connectandsell alumni. UC Berkeley alumni. View all posts by Steve King

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