You're faced with a quandary. It's the end of the month and you've a pile of bills due. You were expecting to go on a special weekend getaway with chums, but don't have the money to pay all your bills and revel in the trip. You realize something must give, so you choose to skip a payment on your Mastercard to have money for the weekend. It's only 30 days, you assert to yourself, and you intend to really get serious about clearing your debts after this month.
That call could cost you thousands of greenbacks.
"Making overdue payments is really the number-one way that purchasers can damage their credit history and credit score," says Chaomei Chen, head of credit risk for the Mastercard division of Seattle-based Washington Mutual. "Conversely, making on-time payments is the easiest way to increase a consumer's credit score over time."
Keeping Score On Your Credit Report
Credit ratings come from info found in your credit reports, which are maintained independently by each of the 3 major bureaus-TransUnion, Equifax and Experian. The information is run thru a mathematical formula to produce your "FICO" score. Fair Isaac Enterprise (FICO) invented and promoted the strategy for determining buyer credit risk. Most FICO scores run between 300 and 850. The higher the score, the better, because buyers with high scores are offered the lowest interest rates for homes, automobiles and other consumer loans.
Even One Delinquent Payment Can Hurt
Chen pointed out that only one late card payment could have a negligible effect on the score of buyers who already have a seriously low FICO score, and inversely could drop the FICO scores of folks that already have particularly high FICO scores up to 100 points. "That difference in FICO score can add thousands of dollars in interest payments over the term of a loan. It's in the consumer's best interest to pay bills on time each month."
According to Fair Isaac, for a $250,000 house loan, based mostly on up to date rates, a consumer with a 700 FICO score would have a once per month payment of $1,614 for a 30-year fixed-rate mortgage. A consumer with a 550 credit score would pay a projected $2,094 a month for the same loan. That's a difference of $480 a month, and $173,000 in extra interest over the life of a 30-year fixed rate mortgage.
That weekend getaway has become terribly high-priced.
In addition to paying debts smartly, Washington Mutual- the sole Mastercard issuer in the U.S. That provides its Visa card customers free online access to their FICO scores-recommends other straightforward paths to increase credit worthiness scores, including:
Pay more than the minimum due on credit card accounts each month.
Keep the balances on rotating credit accounts below 50% of the line of credit.
Test your credit score at least once a year to be certain that info is being properly reported.
Do not be late in paying your debts. Even one late card payment can cause a credit score to fall up to 100 points.
Want to know more about how to fix your credit? Visit our site to learn more.
That call could cost you thousands of greenbacks.
"Making overdue payments is really the number-one way that purchasers can damage their credit history and credit score," says Chaomei Chen, head of credit risk for the Mastercard division of Seattle-based Washington Mutual. "Conversely, making on-time payments is the easiest way to increase a consumer's credit score over time."
Keeping Score On Your Credit Report
Credit ratings come from info found in your credit reports, which are maintained independently by each of the 3 major bureaus-TransUnion, Equifax and Experian. The information is run thru a mathematical formula to produce your "FICO" score. Fair Isaac Enterprise (FICO) invented and promoted the strategy for determining buyer credit risk. Most FICO scores run between 300 and 850. The higher the score, the better, because buyers with high scores are offered the lowest interest rates for homes, automobiles and other consumer loans.
Even One Delinquent Payment Can Hurt
Chen pointed out that only one late card payment could have a negligible effect on the score of buyers who already have a seriously low FICO score, and inversely could drop the FICO scores of folks that already have particularly high FICO scores up to 100 points. "That difference in FICO score can add thousands of dollars in interest payments over the term of a loan. It's in the consumer's best interest to pay bills on time each month."
According to Fair Isaac, for a $250,000 house loan, based mostly on up to date rates, a consumer with a 700 FICO score would have a once per month payment of $1,614 for a 30-year fixed-rate mortgage. A consumer with a 550 credit score would pay a projected $2,094 a month for the same loan. That's a difference of $480 a month, and $173,000 in extra interest over the life of a 30-year fixed rate mortgage.
That weekend getaway has become terribly high-priced.
In addition to paying debts smartly, Washington Mutual- the sole Mastercard issuer in the U.S. That provides its Visa card customers free online access to their FICO scores-recommends other straightforward paths to increase credit worthiness scores, including:
Pay more than the minimum due on credit card accounts each month.
Keep the balances on rotating credit accounts below 50% of the line of credit.
Test your credit score at least once a year to be certain that info is being properly reported.
Do not be late in paying your debts. Even one late card payment can cause a credit score to fall up to 100 points.
Want to know more about how to fix your credit? Visit our site to learn more.
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