So as to acquire and maintain access to credit, one must have a working understanding of how credit works - specifically, how credit ratings are established and tracked by the 3 major credit firms.
Investigation Legends
As discussed in "The Larry Rule," folks who repetitively apply for credit are viewed with suspicion by the credit companies. Nevertheless there are some caveats to the Larry Rule. First, multiple inquiries for a similar purpose - shopping for the best deal on a house loan, for instance - count as just one investigation. Secondly, it is rarely damaging for you to check your own credit score - only credit applications (not plain inquiries) count against you. Third, and most critically, inquiry data is only kept on file for six months. So in other words, the Larry Rule has a 6 month statute of restrictions.
The exceptions to the Larry Rule released above are all good news for clients. Unfortunately, not everything contained in this post is so pleasant. For example, you will believe that your authorization must be given in order for someone to check your credit. Unfortunately, this is a parable, except where it is applicable to employers. A potential creditor, an insurance corporation, an owner, or just about anybody else can access your credit score without your authorization.
Credit Repair Parables
Many individuals believe that clearing debt straight away improves their credit history. Sadly, this one out of many credit correction fables. While a paid debt is marginally superior to a unpaid liability, the truth is that skipped payments and past delinquencies are still ugly marks on your credit score, and simply paying down an old debt may not improve your credit score by even one point.
The good news is that overdue payment and old delinquency info will vanish after 7 years. But the idea that all negative information is wiped out after 7 years is another credit fixing parable. The reality is that Chapter 7 insolvency stays on your record for 10 years, and delinquent judgments can possibly stay on your credit report for keeps.
Another preferred myth is that the act of closing your cards is good for your credit score. This myth is perhaps the most painful, as many people who close open accounts have trouble opening newer ones in the future. The truth is that open, active, and recent accounts help your credit. New credit capacity (i.e. Available credit) is a positive factor in determining your credit history.
Credit Counseling Fables
Credit advisors and debt administration services have received a terrible name over the years, and a lot of the negative hoopla has been deserved. It is, for instance, a myth you can simply pay a company to "fix your credit." Any firm that claims to perform this hands-off service must always be avoided.
But there are good, reputable credit counselling and debt management services who actually do help folks. And despite the tale that using such a service necessarily damages your credit, the truth is that many of these companies are able to reduce their clients ' liabilities and maintain or improve their credit worthiness scores at the same time. When thinking about a credit advisor, look for firms that have these twin goals, not firms that focus solely lowering your liabilities.
Want to know more about how to improve credit score? Visit our site to learn more.
Investigation Legends
As discussed in "The Larry Rule," folks who repetitively apply for credit are viewed with suspicion by the credit companies. Nevertheless there are some caveats to the Larry Rule. First, multiple inquiries for a similar purpose - shopping for the best deal on a house loan, for instance - count as just one investigation. Secondly, it is rarely damaging for you to check your own credit score - only credit applications (not plain inquiries) count against you. Third, and most critically, inquiry data is only kept on file for six months. So in other words, the Larry Rule has a 6 month statute of restrictions.
The exceptions to the Larry Rule released above are all good news for clients. Unfortunately, not everything contained in this post is so pleasant. For example, you will believe that your authorization must be given in order for someone to check your credit. Unfortunately, this is a parable, except where it is applicable to employers. A potential creditor, an insurance corporation, an owner, or just about anybody else can access your credit score without your authorization.
Credit Repair Parables
Many individuals believe that clearing debt straight away improves their credit history. Sadly, this one out of many credit correction fables. While a paid debt is marginally superior to a unpaid liability, the truth is that skipped payments and past delinquencies are still ugly marks on your credit score, and simply paying down an old debt may not improve your credit score by even one point.
The good news is that overdue payment and old delinquency info will vanish after 7 years. But the idea that all negative information is wiped out after 7 years is another credit fixing parable. The reality is that Chapter 7 insolvency stays on your record for 10 years, and delinquent judgments can possibly stay on your credit report for keeps.
Another preferred myth is that the act of closing your cards is good for your credit score. This myth is perhaps the most painful, as many people who close open accounts have trouble opening newer ones in the future. The truth is that open, active, and recent accounts help your credit. New credit capacity (i.e. Available credit) is a positive factor in determining your credit history.
Credit Counseling Fables
Credit advisors and debt administration services have received a terrible name over the years, and a lot of the negative hoopla has been deserved. It is, for instance, a myth you can simply pay a company to "fix your credit." Any firm that claims to perform this hands-off service must always be avoided.
But there are good, reputable credit counselling and debt management services who actually do help folks. And despite the tale that using such a service necessarily damages your credit, the truth is that many of these companies are able to reduce their clients ' liabilities and maintain or improve their credit worthiness scores at the same time. When thinking about a credit advisor, look for firms that have these twin goals, not firms that focus solely lowering your liabilities.
Want to know more about how to improve credit score? Visit our site to learn more.
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