How to Improve Credit Scores Legally

Your credit score, also known as your FICO rating, is a three-digit number based on the items in your credit report, such as collection accounts, credit cards, lines of revolving credit and home mortgages. Lending agencies and businesses use this score, which ranges from 300 to 850, to determine your credit risk, or the likelihood that you will repay your debts. A top credit score will qualify you for the best rates and terms on credit cards and loans, while a low score can prevent you from qualifying for a credit card, buying a home or even getting...

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Does Carrying a Balance Hurt Your Credit Score?

Credit cards have become almost a necessity in modern day life. They make day-to-day living more convenient, help with emergencies, and show other lenders, like mortgage bankers, your ability to repay a debt. However, with credit cards comes a balance, which may hurt your credit score. What Is a Balance? When you open a new line of credit, the issuer sets a spending limit for that credit card. Anything you charge on the credit card adds to...

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Facts About Doing Credit Checks

A credit check is a method by which a company can review your recent financial behavior to render an informed decision about whether or not to lend to you. The information contained within your credit report will also likely determine the interest rate you are charged by the lender. The Facts A potential creditor or employer must have your permission before performing a credit check on you. Government agencies, however, such as the FBI, can...

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How to Expunge a Collections Record in Michigan

Debt collection practices are governed in the state of Michigan by state statutes known as the Michigan Collection Practices Act (MCPA) and by the federal law known as the Fair Debt Collection Practices Act, or FDCPA. The state of Michigan adds further protections to debtors over and above those mandated by the FDCPA. If you have collection accounts on your credit report, you can expunge or delete them. Instructions 1 Get copies of your credit reports. Go to AnnualCreditReport.com for your free yearly credit reports from all three credit...

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Is There Any Way to Increase Your Credit Score With a Charge-Off?

Financial hardships such as unexpected expenses or the loss of a job can lead to missed payments on your credit card. After a period of time, your creditor will close the credit card account, leading to a charge-off on your credit report. Charge-offs have a negative impact on your credit report and score, but you can take steps to improve your credit. What Are Charge-Offs? Charge-offs occur when you fail to pay your credit card. If a credit card debt goes unpaid for a period of time, typically 120 to 180 days, the creditor will close the...

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How Long Does It Take for a New Credit Card to Show Up on a FICO Report?

The FICO scoring system is the most widely used method for calculating credit risk in America. Your FICO report contains most of your history as a credit consumer as reported to the three major bureaus by past creditors. New creditors can begin reporting on you almost immediately. Time Frame Creditors usually update information with the three bureaus--Equifax, Experian and Transunion-- the first day of the month after you opened the credit...

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How Much Will a Secured Credit Card Boost My Credit Score?

A secured credit card is a credit card where the corresponding credit limit is determined by a deposit made with the issuing financial institution. The cards are often used to rebuild credit history. According to MyFICO, your FICO credit score ranges between 300 and 850 and changes as the information in your credit report changes. A secured credit card can boost your credit score but could also lower it. Identification Your credit score is based on your credit report. Thirty-five percent of your FICO score reflects your payment history,...

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Does Paying More Than the Minimum on a Credit Card Increase Your Credit Score?

Paying more than the minimum on your credit card does not directly affect your credit score, but the more you reduce your debt usage the better your score becomes. Card providers typically set minimum monthly payments at just 2 to 3 percent of your card balance, which makes for a slow repayment period and more interest earnings for them. Minimum Payments Your monthly credit card statement shows your minimum payment due. Many consumers opt...

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Does Closing Credit Card Accounts With a Zero Balance Harm My FICO Score?

Your FICO credit score will be harmed if you close a credit card with a zero balance. The size of the drop will depend on several factors, including how long you've had credit and how many other cards you have. Function If you close one of your credit cards, it will eventually stop being reported on your credit report. According to the Motley Fool, positive credit history will remain on your credit report indefinitely as long as the card is open. If you close it, that information will drop off your credit report and your payment history,...

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How Long Can a Mark Legally Stay on Your Credit Report?

Many people find themselves in a situation where they have bad credit. People have financial problems and have a hard time paying their bills on time. Sometimes, they get divorced and the income that was paying for one household is now paying for two. Maybe medical bills have put you in a tough place. Whatever the reason, you should know that bad marks on your credit are not permanent. Time Frame Information stays on a credit report for different...

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Does Closing Credit Cards Improve Credit Score?

Closing credit card accounts typically does not improve your credit score. In fact, it would more likely hurt your credit score because your credit history with the card remains the same but canceling the card lowers your credit utilization ratio. History and credit use are significant components in your individual FICO credit score. Closing Cards Typically, consumers consider closing credit card accounts when they have paid off balances...

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Will Paying Off a Mortgage Help Boost Your Credit Score?

Paying off your mortgage will affect your credit score, but the impact will vary depending on your individual circumstances. The higher your score is, the less of an effect paying off your mortgage will have. Other personal financial circumstances must be considered when calculating how your credit score will be affected. Effects Paying off your mortgage can help to boost your credit score. Credit scores take into account the ratio of available credit you have to what you have utilized. If you have a lot of credit available to you but do...

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Differences in Credit Reporting Agencies

The three primary credit reporting agencies in the U.S. are Equifax, Experian and TransUnion. These companies are competitors and don't usually share information with one another. Thus, consumers should review all three reports to get an overall view of their credit ratings. Significance Each credit report contains information about credit cards, loans, collections and legal judgments. According to Consumer Reports, lenders tend to use the Equifax report more often than other reports. However, in many cases, lenders look at all three reports...

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How to Read a Canadian Credit Check

A credit score is used by various Canadian financial institutions to decide whether to lend you money, and at what interest rate. Various factors, such as your level of current debt and credit card usage, are used to calculate this credit score. Occasionally, information on your Canadian credit report may be inaccurate and negatively affect your credit score. Learn how to read a Canadian credit check to verify your financial data and protect your credit rating. Instructions 1 Flip through your Canadian credit check. Canadian credit reports...

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Which Items Correct a Credit Report and Raise a Score the Fastest?

You have a right to dispute incorrect items on your credit reports, according to the Federal Trade Commission dispute information website. Mistakes on reports hurt your credit score because FICO, the major score compiler, uses information from your reports to come up with the credit score. Your score goes up quickly if you correct your report by forcing the removal of incorrect items with heavy influence on credit score calculations. Payments The Motley Fool financial website cites payments as the most frequently misreported items on credit...

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What Does Tier 1 Mean for a Consumer Credit Score?

Not being in the top tier of credit score means you pay much more in interest on loans even if you have above-average credit. A borrower with a few more credit score points than another does not always mean he is a better borrower than the other, so most lenders lump borrowers into categories or tiers. Identification A Tier 1 credit score puts you in a lender's highest-rated credit score category. The top tier changes in time, often with the state of the economy and lending sector, and with whatever financial institution you choose. A good...

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Do Collections Ruin Your Credit?

Collection agencies are third-party businesses that attempt to collect outstanding debts due to a creditor. Collection agencies can report that debt to credit bureaus if they have purchased the debt from your original creditor. When you are first faced with a collection letter, exercise your right to dispute the debt or request further information verifying that the debt is valid within 30 days of receiving the letter. How collection agencies locate you If your original creditor is a credit-card company, utility company, student-loan institution...

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Things That Lower Your Credit Score

Protecting your credit score from damage is crucial because your major purchases in life such as a home or a car depend on it. Maintaining a healthy credit score or improving your credit worthiness starts with being aware of the things that can lower your credit score. It does not take long to learn the basics of good credit management, but achieving a favorable credit rating requires consistent responsible behavior over time. Missed Payments...

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How to Get a Free Credit Report Through Experian

Experian is one of the nation's major consumer credit reporting agencies, the other two being Equifax and TransUnion. The Fair Credit Reporting Act requires each of the credit reporting agencies to provide a free copy of your credit report every 12 months. Your credit report includes personal information and details of your financial behavior. This information is used by employers, credit card companies, insurance companies and businesses to evaluate...

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Critical Information on Bad Credit

Checking your credit report will either reveal a pattern of good credit or a patten of poor credit. Credit scores 650 or higher are acceptable by most lender standards. Regrettably a score lower than 650 places you in the sub-prime category, wherein it becomes difficult to acquire financing. Causes There is no one cause of bad credit, and people who have a low credit score can likely point to various contributing factors. Oftentimes, bad...

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How Long Does it Take to Repair Your Credit After Repossession?

If you fail to make timely payments on an item such as a car, your creditor can repossess, or take back, the car without first going to court. The repossession's impact on your credit score is both negative and lasting. Time Frame A repossession remains on your credit for seven years. After the repossession comes off your credit report following this time period, your score should improve, depending on whether you have made timely payments on other debts. Additional Effects As a result of the repossession, the creditor may sue you...

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Laws on Reporting to Credit Bureaus

The Fair Credit Reporting Act (FCRA) and the Fair Debt Collection Practices Act (FDCPA) govern the credit reporting industry in the United States, according to the Federal Trade Commission. These federal laws enable companies to report on-time payments and late or unpaid accounts. They also protect consumers from unfair credit reporting practices due to a dispute with a merchant or identity theft. Applicable Time Frames Incidents in which someone failed to pay their bills on time, or didn't pay then at all, can show legally on credit reports...

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Does Co-Signing on a Loan Benefit the Cosigner's Credit

If someone cosigns a loan and it goes into default, lenders ask the cosigner to help repay it as much as 75 percent of the time, according to the Federal Trade Commission. Although cosigning is often seen as a negative because it means the other party was too risky to obtain a loan themselves, the cosigner and primary account holder can raise their credit scores with a good payment history. Benefits When you cosign on a loan, you share credit history with another party. If the loan has had a good history, you will instantly receive that...

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The Quickest Way to Bring Up My Credit Score

People planning to apply for a new line of credit such as an auto loan or a mortgage may want to increase their credit scores before getting the loan. Lenders base interest rates for loans on an individual's credit score, a number between 300 and 850 that helps the lender assess how risky it is to lend money to that person. Bringing up your credit score qualifies you for lower interest rates because lenders see you as more likely to pay back your...

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What Can Drop Your Credit Score Down 60 Points in Less Than a Year?

Sixty points could be enough to cost you thousands of dollars on a loan and you might lose these points with just one negative item. You can ding your credit in far less than a year, maybe even in just one month. With time, you can reverse the effect of something causing 60 points of damage. Considerations The Fair Isaac Corporation (FICO) credit scoring algorithm can be very temperamental, so you cannot precisely predict the number of points any negative item can cost. In some cases, a negative can improve a credit score. The Fair Isaac...

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How Liens Affect Your Credit

Liens are often thought of as terrible for credit scores, but some types of liens have no effect on a credit score. Whether a lien affects your credit score depends on why you have a lien on your property. Even if you have a lien that affects your score, such as a tax lien, you might be able to get it off your record. Types The liens that affect your credit occur with an unpaid debt to the government, such as a lien due to outstanding property tax or federal tax. A mechanics lien, which usually occurs in conjunction with home improvement...

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Does Account Protection Affect a Credit Rating?

Whether it's protection against identity fraud, or a buffer in case you go over your spending limit, account protection can save you from hefty fees and the headache of clearing your name. Some forms of account protection can potentially save your credit rating, while a few may cost you points if they involve a credit check. Considerations Account protection can only affect your credit rating if it comes with a loan or a credit check. The most common type of protection that could affect your credit rating is overdraft protection. Banks...

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How Long Does an Account Delinquency Affect Your Credit Score?

Whenever you fail to make a payment on one of your credit accounts, this is considered to be a delinquency, even if the payment was as little as 30 days late. The creditor will report the delinquency to the credit bureaus and it will appear on your credit report and damage your credit score. Time Frame Most account delinquencies can appear on your credit report for no more than seven years from the date of the delinquency. In the case of an account sent to a collection agency, this date is when it was charged off and sent to the agency,...

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How a Spouse's Death Affects My Credit

The death of a spouse can cause emotional and financial distress to the spouse left behind. During the course of a marriage, the financial lives of the spouses are often intertwined. A spouse's passing can rock the financial foundation of a family, especially if the death is unexpected. Your credit score impacts several areas of your life, including obtaining a job, so it's a good idea to understand how your spouse's death can affect your credit. Credit Scores The information contained within your credit report determines your FICO credit...

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How to Settle With a Creditor Without Going to Court

Appearing before a judge because your credit card bill got out of control isn't the best option for your financial health. If you deal with creditors outside the judicial system, the outcome usually will be much more satisfactory for both your mental health and your credit record. The sooner you talk to a creditor and reach an agreement, the sooner the problem will be out of reach of the court. Make sure to get documentation of any promises a creditor makes to you. Instructions 1 Contact the creditor to whom you owe money as soon as you...

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Will Checking My Credit Lower My Score?

If you are getting ready to apply for a new loan or credit card, one way to find out where you stand is to check your credit report. You can check your own credit report or credit score without hurting your score at all. In fact, checking your credit can help you identify errors that you can correct to boost your credit score. Credit Check Effects When you check your credit report or credit score, you run a credit inquiry on yourself. Credit inquiries are listed on your credit report in two major categories. Soft inquiries, which include...

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What Damages Your Credit Score?

Your credit score is your passport to buying a new car or a new house, as well as many other things. For most people, this is enough incentive to do their best to maintain a good score. For many, a good credit score also signifies pride and honor. It's part of their reputation, so they will work hard to protect it. As the old saying goes, knowledge is power, and knowing what might cause your credit score to take a tumble is no different. Credit...

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