Will My Credit Score Rise If I Pay Off My Collection Accounts?

Whether you're in debt to a lender or to a collection agency, it will hurt your credit score. Paying down that debt or clearing it completely will raise your credit score. However, the record of the collection will stay on your credit report for years after you've settled the account. Depending on your credit situation, you may be able to get the collection removed from your report by negotiating with the agency. Calculating Credit Scores ...

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How to Fix Your Credit in 30 Days

Over 30 million Americans are living with massive amounts of credit debt and poor credit scores under 620, according to MSN Money. Poor credit scores below 600 limit your ability to apply for additional credit. Potential employers often check applicants' credit scores to learn about their fiscal responsibility. Following a few easy steps will improve your credit score. Instructions Correct Your Credit Report 1 Obtain a copy of your credit...

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How to Fix My Credit Score for Free

Your credit score may be the single most important number in your life. Ranging from 350 to 850, your credit score is a measure of how dependable you are at managing your debts. Your credit report will be pulled whenever you apply for new debt and occasionally when you apply for rental property or a new job. Because of this, a low credit score can result in you being turned down for credit, loans, housing and even employment. Fortunately, you do...

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The Effects of Bankruptcy on Credit Ratings

Bankruptcy is not a simple way out of debt or an easy ride to a fresh start. It is intrusive and draining, though sometimes absolutely necessary. Before filing for bankruptcy, it is important to understand the short- and long-term effects of bankruptcy on your credit score. Severe Drop According to Bankrate.com, bankruptcy can lower your credit score by hundreds of points. Also, creditors that are being paid or discharged through your bankruptcy...

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How to Calculate Credit Rating

Your credit rating or credit score is a number that summarizes the credit risk you present to a lender based on your credit history. The FICO credit rating ranges from 300 to a perfect score of 850 and is the standard used by major credit bureaus and most lenders. Unfortunately, it's not possible to calculate credit rating precisely because the firm that created the system, Fair, Isaac & Co., keeps the algorithm secret. But the main components and factors making up the credit-rating system are public knowledge. By using them, you can learn...

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FICO Score Facts

Knowledge is power, and in times of economic turmoil, this sentiment becomes truer than ever. Knowing how future lenders view you is important. Even more important is determining the formula that can gain you the highest FICO score. The higher your FICO score, the better for you when you want to take out a loan, apply for a credit card, a mortgage, an apartment or even a job. Once you understand some facts about FICO, you have taken the first step in gaining some power and possibly raising your score. Fair Isaac Corp. The Fair Isaac Corp....

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How to Design a Credit Scoring System

When customers apply for credit through your business, it's up to you as a business owner to decide how you rate them as borrowers. You can even design your own credit scoring system, making it as similar or dissimilar to the FICO credit scoring system as you wish. The key requirement is that your system assesses the likelihood that the applicant will repay the loan. You might consider the amount or type of debt the applicant owes, his tendency to make payments on debts, his income or a combination of these. Instructions 1 Choose the criteria...

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Credit Repair Assistance

Credit repair isn't instant. It can take months or longer to repair damage caused by years of poor credit habits. While the process isn't easy, repairing your credit and building a better credit score helps you get loans and credit cards at a low interest rate. Fortunately, there are several ways to get assistance to clear your bad credit. Consumer Credit Counseling Some people can manage their debt and maintain a high credit score without professional help. But if you find it difficult to repair credit on your own, perhaps now is the time...

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Why Do Credit Bureaus & Credit Cards Rule a Credit Rating?

Though it may seem as if credit bureaus and credit cards rule a credit rating, the truth is that consumers are ultimately in charge of their own credit status. Credit bureaus are information clearinghouses and credit cards are only one aspect of a credit rating. A credit rating is a three-digit number that lenders, insurance companies and some employers use to determine if a consumer is a good credit risk. Definition Credit bureaus compile and maintain information from creditors. The three main credit bureaus, Experian, TransUnion and Equifax,...

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How to Review Your Credit

When you charge a purchase, apply for a loan, move or obtain insurance, your transaction information is recorded. Consumer reporting agencies track this record in a credit file, which is used to determine your creditworthiness. Good credit makes it easy for you to get a mortgage, rent a car or sign up for public utilities, among other tasks. Bad credit can put these common transactions out of reach. You can easily review your credit for accuracy....

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How Long Does a Bankruptcy Stay on a Credit File?

Bankruptcy is a last resort for people buried in bills, according to the Federal Trade Commission (FTC). While it allows you to get rid of most or all of your loan debt, it also damages your credit and makes it difficult to open new accounts. You can't hide your bankruptcy as it will appear on credit reports from Equifax, TransUnion and Experian that lenders review when deciding whether to extend credit. Bankruptcies are considered both in your credit scores and during the credit application evaluation. Types Consumers usually file either...

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What Do the Codes Mean on My Credit Report?

Your credit reports contain a host of information about your financial history, such as what kind of credit accounts you have open, and your past behavior with those accounts. Each company that collects the data for these reports typically uses codes or abbreviations to represent data, and knowing what these mean is important if you want to understand your report. Biographical Data Each credit report details an individual consumer's past history of using credit As such, each report contains specific identifying information unique to each...

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My Credit Score Is Now 592, How Can I Increase It?

Credit scores can get low for a number of reasons, such as a poor debt-to-income ratio, late payments, or exceeding a limit. As the saying goes, if you're in a hole the first thing you do is stop digging. The key to repairing a low credit score is learning what factors are bringing it down, and take all the steps necessary to turn those around. Once you do that, you have to start managing your credit responsibly so it doesn't go back down. Instructions...

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How to Find Total Credit Score on Credit Reports

Your credit report and score is managed by three main recognized companies: Equifax, TransUnion and Experian. Each of them has created its own statistical method for analyzing your credit and assigning you a score, which is why you have three credit scores. If you are considering applying for a loan and want to assess your credit worthiness, it is best to obtain your credit report and credit score from each of the bureaus. Instructions 1 Log in to any one of the main credit bureau's websites and look at the list of products offered. 2...

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Does Opening Many Bank Accounts Hurt My Credit Score?

Consumers often fret about the seemingly mysterious calculations involved with determining a credit score. Facts, myths and misconceptions frequently occur when it comes to theories about how credit scores are calculated. It's key to understand what actions hurt your credit score so you can continue working toward a higher score. Some people may find that they have accumulated numerous bank accounts over the years, and it is important to understand...

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How Long Does a Satisfaction of Judgment Take to Clear?

A debt that is the result of losing a court case is called a judgment. Judgments appear on your credit report and can adversely affect your credit rating. A "satisfaction of judgment" is a legal document that serves as a court record indicating that you have paid your debt. Credit reporting agencies regularly update credit reports based on court records, and they might update the status of your judgment, but you might need to be proactive to ensure...

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Definition of Credit Repair Companies

Credit repair companies blast consumers with salivating advertisements that claim the company can wipe out bad credit instantly or possess the secret to boosting a score. While these companies might offer legitimate services, most consumers can do without one, because credit repair may best be done alone. This type of company may be useful in helping people too busy to deal with some of the administrative tasks of credit repair. Identification Sometimes called "credit repair clinics," credit repair companies offer customers help rebuilding...

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How to Restore My Credit for Free

When you are turned down for a loan or credit card, the first thing to do is ask that company for a copy of your credit report. By law, they must provide you a free copy, if requested within 60 days of the denial. You can also obtain a free report from Equifax, Experian and TransUnion once every 12 months. There is no quick fix to repair your credit. According to the Federal Trade Commission (FTC), "... it takes time, a conscious effort and sticking to a personal debt repayment plan." Instructions 1 Request a credit report. If you have been...

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Fast, Easy and Free Ways to Improve Your Credit Score

Your credit score goes up and down based on the ways in which you use credit. Scoring companies such as FICO and the the three main credit bureaus pull data from your credit reports, plug it into their formulas and come up with a three-digit indicator of your credit worthiness. You often can improve your score within about two months through disputes, settlements and other simple, free methods. Assessment Review your Experian, Equifax and TransUnion credit reports to get an idea of how much free credit score improvement you can accomplish....

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The Best Time to Check a Credit Report After Paying Off Bills

You have had the satisfaction of paying off bills and now want to see the improvement on your credit report. You are entitled to one free credit report from each of the major credit bureaus each year. The three credit bureaus are Equifax, Experian and TransUnion. It is best to check all three. Financial Institutions Large financial institutions, including finance companies and banks, usually update the status of their accounts monthly. Credit...

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What Items Do I Send to the Credit Bureau When Someone Dies?

While a death in the family can be emotionally destabilizing, you should act swiftly to notify the major credit bureaus and stop thieves from trying to use the deceased's financial data. Scam artists often use a deceased's private information for credit fraud. You should send the bureaus documents identifying the deceased and proof that the person is dead. Identification Write a letter stating that the person in question is deceased and request a "deceased alert," according to Jim Wang of Bargaineering. A deceased alert notifies creditors...

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How to Run a Credit Report for Customers

It is wise to run a credit check on any customer to whom you extend credit or allow to delay payment for a service, particularly if you have a large volume of customers. The simplest method is to subscribe to the business services offered by the three major credit bureaus (Transunion, Equifax, and Experian). Most debts from major companies will be reported accurately to all three of them, but others may only report to one or two. You also have the alternative of working with a third-party credit checking service, which has its own subscriptions...

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How to Report Tenants to Credit Agencies

When a landlord rents a unit to a credit-worthy tenant, the landlord does not typically foresee that the tenant will later skip payments and violate the lease. When this occurs, landlords often have trouble tracking down tenants to recover the money they are owed, but they still desire some form of recourse. If this has happened to you, you can report tenants to credit agencies to both warn potential future landlords of the tenants history, and for...

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How to Correct a Credit History

Your credit score is more than just a number. Lenders use this number to evaluate your credit history. Without this number, they can't assess whether you're a good candidate for a loan or credit card. A horrible payment history or a bankruptcy can result in a negative rating. But regardless of your past mistakes, you can correct your credit history and acquire a higher score. Instructions 1 Organize documents. Be aware of your payment due...

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Building Good Credit Scores

Building good credit scores can open the door to several opportunities in the finance world. Banks and lenders are more apt to approve your application, and once approved for credit, these lenders are more likely to assign a favorable interest rate to your account. Lower rates equate to cheaper loan payments. Payment Tips Getting behind on payments with credit card companies, mortgage and auto loan lenders can play a key role in destroying...

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Do I Earn Credit With a Debit Card or a Savings Account?

Paying credit accounts on time and developing a solid credit history over many years can help you earn points on your credit score. But you may also wonder if owning and responsibly managing a debit card or a savings account can help you earn points on your credit score since these are two common consumer assets. Factors That Affect Credit Score Five factors affect points earned or deducted on a credit score. The most significant element that FICO looks at when determining the score is the payment history (payments on time and in full)....

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3 Tips for Updating Your Credit History

Your credit report contains information on your borrowing and repayment history. Each item on the report, known as a trade line, includes the name of the creditor, the amount of money borrowed and your repayment history. If you discover a mistake on your credit report, you should take the steps necessary to update the report with the correct information. Significance Creditors purchase your credit report when you apply for a mortgage, credit...

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How Is a Student Loan Payment History Reported?

Federal and private student loans help millions to pay for post-secondary training needed in today's job market. Although loan payments can strain graduate budgets, they can also establish a good credit record that pays off in low rates on loans for major purchases. In 2008, 67 percent of graduates left school with a student loan, averaging $23,200 per student. Federal Loans Monthly payment history for subsidized and unsubsidized federal...

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Do Unpaid Medical Bills Affect My Credit?

One way to quickly get over your head in debt is to get seriously ill. The cost of doctors, medications, treatments, therapies and hospital stays can quickly add up even if you have insurance. Meanwhile, at the same time you've been sick, your ability to earn a living has been hampered. Either one of those things could easily put you behind in your payments -- and both together can be crippling. Unpaid medical bills can't be ignored, though, because they do affect your credit. How Doctors Handle It When doctor and hospital bills go overdue,...

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Can a Cell Phone Build Credit?

Cell phones are an irony in the world of credit: it takes good credit to get one, but paying your bill every month does nothing to build credit under the traditional model. As a response to the needs of many who pay bills on time, alternative credit-scoring companies allow people to self-report common utilities, like cell phone bills. Very few lenders, however, accept alternative credit scores. Identification As of 2010, the FICO scoring...

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Definition of Credit Scoring Brackets

A few points can cost you thousands of dollars over the lifetime of a loan, because lenders set interest rates depending on which credit scoring bracket you fall into. Credit scoring brackets or tiers are not always the same across all industries or even within them. Finding out typical scoring brackets gives you a goal to aim for when improving your credit. Identification Credit scoring brackets are charts lenders reference when setting the interest rate on your loan. A lender, for instance, might consider all scores above 770 the top...

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Does Having a Revolving Card That Is Unused Help My Credit?

If you have a credit card that you are not using at all, closing that credit card account is likely to hurt your credit score. Therefore, try to keep these unused cards to maintain your good credit score, as long as you can avoid the temptation to use them to overspend. Utilization Ratio The major way in which an unused revolving account, such as a credit card, affects your credit score is through your utilization ratio. This number is the amount of credit you are currently using divided by the amount of total credit available to you through...

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A Negative Bank Account Balance's Effect on Credit

Banks have a reporting system for accounts called ChexSystems. When they implement this system it does not affect your consumer credit rating, but a negative account balance can appear on your credit history in a few circumstances. Therefore, you should not risk your credit rating by assuming that your banking history cannot affect your ability to obtain credit. Effect The major credit bureaus do not track banking history or account balances, so a negative balance does not have an immediate effect on your credit rating. However, the bank...

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Is a Cell Phone Plan a New Line of Credit?

You cannot get a cell phone contract with most providers unless you have good credit, but this does not mean that credit reporting agencies view cell phones as a line of credit. Cell phones can affect credit, but almost always only for negative reasons. On the plus side, because cell phone plans are not a line of credit, they do not affect your debt load in the eyes of lenders. Identification The big three credit reporting bureaus in the...

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