Your credit score defines you financially. Establishing and maintaining good credit will make your life infinitely easier. To establish a good credit score you must make your payments on time and in full every month. You can also improve your credit score by minimizing your debt. Learn more here about your credit score and what it means for you.
Is There Really A Free Credit Report?
It's important to check your credit report to know your financial standing and protect yourself against fraud. Once a year, a free copy of your credit history is available from each of the three credit reporting bureaus.
Canceling Credit Cards Affects Credit Score
Canceling open lines of credit may hurt your credit score. There are a couple of ways that canceling a credit card account can hurt your credit score. Part of your credit score is based on how long you've had credit accounts opened. So, a credit card with a zero balance that has been opened for 20 years will help your credit score more than a credit card account that has only been opened 6 months, 2 years, 5 years, or even 10 years.
Strategy For Improving Credit Score
A couple is planning on getting a new mortgage in a couple of years and wants to pay off credit card debt with a home equity loan. If you can trade non-deductible debt like credit cards for deductible debt like a home equity loan, it's usually the better deal. A home equity loan will charge less in interest than credit cards and you can write the interest you pay off on your federal income tax return.
Closed By Consumer Stated On Credit Report
A reader found "closed by consumer" several times on her credit report. Ilyce states that it is impossible to remove these closed accounts and that it is best to hold a credit card for a long time.
Avoid Late Charges By Paying Online
If you make a payment a few days late, will that trigger higher rates from other creditors? Late payments are not usually reported for less than 15 to 30 days. You should sign up for automatic payments to avoid all late payments. Late payments on credit cards, mortgages or any other bills can severely affect your credit rating and credit score.
Don’t Pay For Your Credit Report
You can get a free copy of your credit report each year. President Bush signed legislation that required each of the three major credit reporting bureaus, Experian, Equifax, and Trans-union to give you a free copy of your credit report each year. Ilyce Glink tells you how to get a free credit report and how to avoid being scammed by companies that give you a credit report copy but then charge you a fee for "credit monitoring".
Options To Pay Off Back Taxes
If you owe back taxes to the IRS, you may be able to work out a payment plan with the IRS. You may also be able to borrow against any property you own to pay the IRS. However, if you're credit is too low to take out a conventional loan, you could also talk to the better B/C lenders (also known as sub-prime lenders) that specialize in helping people borrow against their home equity even with a poor credit score.
Refinancing With No Income
A homeowner is refinancing their home after a divorce without any income but with an excellent credit score. Having good credit doesn't compensate for not having enough income to make the payments on the loan. A no-doc interest-only loan will help keep her payments as low as possible and get a loan without showing her income.
Identity Theft Victim Action Items
What can you do if you've been the victim of identity theft? It's unusual for the Social Security Administration to issue a new number, even in cases of identity theft, so you should work with the credit reporting bureaus to clean up your credit. When someone has stolen your identity you should also contact the police and your creditors.
Charged Off Credit Account
What does it mean if creditors put "charged off" on your account? This is a negative reporting that could severely hurt your credit score. A collection agency can pursue you for debt that has been charged off. While it is legal for them to pursue you, they have to live within the rules of the Fair Debt Collection Act.