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.

 

Fixing Your Credit is Doable.

If you find yourself with less-than-good credit, you are not alone. Business Insider, an online business news website, reports that one in 50 households owes more than $20,000 in credit card debt. Coinciding with this alarming figure, the site further states that more than 2 million Americans look to credit counselors each year to avoid bankruptcy.

Before your finances fall into the bankruptcy category, you can take steps to help turn your bad credit around. Just ask James Cheslek, Dean of Academic Affairs at Brown Mackie College – Albuquerque. Cheslek is a retired corporate and trial law attorney who helps college students with bad credit get back on track.

“If you want to be successful, it is important to not let credit card debt get out of control,” Cheslek says. “Many people get frustrated because their credit is not up to par. They don’t realize how easy it is to fix. It may take some time, but it is doable.”

Step one: Request a free copy of your credit report.
Every American is entitled to a free copy of their credit report under the Fair Credit Reporting Act (FCRA). Each of the three reporting agencies – Equifax, Experian, and TransUnion – is required to provide it once every 12 months, if you ask for it. To order your free copy, visit annualcreditreport.com, or call (877) 322-8228.

Step two: Read your credit report carefully for inaccuracies.
“Spend some time figuring out what all the symbols mean. Learn what’s good and what’s bad,” Cheslek says. “Reporting companies get information from creditors. They simply take the information and add it to your report.”

Step three: Dispute inaccuracies.
The FCRA further states that a reporting agency must correct any inaccuracies on your report. To dispute an item, notify the reporting agency of the inaccurate information. “They must investigate by forwarding your information to the company that provided the disputed item,” says Cheslek. “When any information proves incorrect, the FCRA calls for all three reporting agencies to remove it from your credit report.”

Step four: Request verification of debt.
The Fair Debt Collection Practices Act (FDCPA) gives consumers rights against debt collectors. “Here’s the deal,” Cheslek continues. “Debt collectors buy old debt for pennies on the dollar. They call and tell you they are collecting on behalf of another company. However, the company that originated the debt has written it off and retired the file.”

This may be the best kept secret in America. The FDCPA entitles you to write to the original company and ask for verification of the debt. They have 30 days to complete the process. Usually, they can’t find the file or verify the amount,” says Cheslek . “You may need to send follow-up letter to the credit reporting agencies to say, ‘Take this off.'”

Step five: Once your credit is fixed, keep it fixed.
Cheslek offers the following rules of thumb to follow in the interest of keeping a good credit score:

* Pay bills on time. Late payments add fees to the balance owed.
* Change the payment due date if the current one is inconvenient.
* Pay more than the minimum due, even if just a little.
* Do not skip any payments. Skipped payments lead to bad credit.
* Do not close old accounts. Creditors look at how long you’ve had credit.
* Keep one account with no balance.
* Do not apply for loans you don’t need. Every loan request shows on your credit report for two years; a denial becomes a negative mark.