You may already know that your credit score can tell a lot about you. But, did you know that it's perfectly legal for perspective employers to refuse to hire you for a job if you have a low credit score?
A survey conducted by VISA USA found that about 80% of Americans didn't know that their credit score could be used in hiring criteria. "Credit scores have become the defacto GPA for all aspects of modern life, because they can affect everything from getting a job to being able to buy a house," says Jason Alderman, Director of Financial Education for VISA USA.
So, if you have a low credit score, now may be a good time to learn how to raise your credit score.
Until next time - be well and prosperous!
PapaJoe
Credit Score CheckCredit Score Newshow to raise your credit scoreunderstanding credit scoreyour credit score
True or False.
The Financial Planning Association lists "getting a handle on your credit score" as one of their 5 tips to follow to get your financial affairs in order.
True
The association does recommend you get a handle on your credit score because the higher your score the more likely it is you will be approved for credit and the lower the interest will be for this credit.
The other 4 things they identified as needing to address to get your financial affairs in order are:
-
Develop a budget that includes regular savings to be put aside for emergencies.
-
Set up a will with durable power of attorney.
-
Plan for retirement - start early and save regularly.
-
Check to make sure you have adequate insurance coverage. Take the time to make sure you understand what you're paying for and that it provides the coverage you need.
Remember, if you’re not working the system, it’s working you.
PapaJoe
credit score helploans credit scoreunderstanding credit scoreunderstanding my credit scoreunderstanding your credit scoreUnderstandingCreditScore
True or False?
I have credit cards that I never use. I want to cancel them to reduce my risk of losing them and to reduce my risk of identify theft. What I cancel can affect my credit score.
True.
Canceling credit cards can have a negative effect on your credit score because it can result in your utilization rate going up and your average length of credit going down.
If you decide to cancel some cards, take the following into account when considering which cards to cancel.
An alternative to canceling credit cards is don't cancel them, just cut them up. If you ever decide that you need the credit again, just request a new card.
Remember, if you’re not working the system, it’s working you.
PapaJoe
credit score helpunderstanding credit scoreunderstanding my credit scoreunderstanding your credit score
True or False?
Once I have all of the information from my credit report, I still cannot calculate my own credit score.
True.
The Fair Isaac Corp., which designed the FICO score, has issued guidelines regarding which factors are included in your credit score.
These are:
But they have not, and probably never will, given a breakdown on how each factor is calculated. For example, 10% of your score is for the type of credit used.
But some unanswered questions are:
-
Do I need to have a mortgage to get the maximum score in this area?
-
How many installment loans is the right amount?
-
Do I get penalized for having too many or too few credit cards?
That's enough to give you the idea. Even though you can't calculate your exact credit score, you can still manage your credit score. By using the guidelines you can develop a financial plan that considers these guidelines. The end result should be a higher credit score.
Remember, if you’re not working the system, it’s working you.
PapaJoe
credit reportcredit score helpcredit score reportsfico credit scoreloans credit scoreunderstanding credit scoreunderstanding my credit scoreunderstanding your credit score
True or False?
I pay my MasterCard bill on time every month, therefore they cannot contractually raise my interest rate.
This is False if there's a provision in my contract called Universal Default. Quite simply it states, "If you fall behind on any payment in any account they can consider it falling behind on their account." That could include medical bills, utility bills, rent, etc. Your interest rate could go from low and reasonable to 25% or more.
Not all credit cards have Universal Default. When choosing a new credit card or deciding which credit card to keep or cancel, read the small print. Obviously choose the credit card that does not have Universal Default. The last number I saw said 45% of credit cards do not have Universal Default. They can change that anytime they want. So when they send you that notice saying your contract has changed, read the small print to see if Universal Default has been added or deleted.
Remember, if you’re not working the system, it’s working you.
PapaJoe
credit score helpcredit score ratingscredit score reportsficofico credit scoreunderstanding credit scoreunderstanding my credit scoreunderstanding your credit scoreuniversal default
True or False?
According to federal law, I can get my credit score free once a year from the three major credit bureaus.
False.
Trick question. Federal law states that you can get a copy of your credit report free once a year - NOT your credit score.
If you want your credit score, you must still pay for it. It is strongly recommended that you review your credit report a minimum of once a year.
You can get your credit report free in one of three ways. You can either:
Annual Credit Report Request Service
PO Box 105281
Atlanta, GA 30348-5281
Remember, if you’re not working the system, it’s working you.
PapaJoe
free credit scoreunderstanding credit score
True or False?
It is against the law when it comes to credit to discriminate against me because of my gender.
True.
Federal law prevents the credit industry from discriminating against you because of your gender, national origin, age, marital status, or the receipt of public assistance.
However, federal law does not specify what factors are to be used in determining your credit score.
The guidelines used by FICO are:
Your credit score is based on:
Remember, if you’re not working the system, it’s working you.
PapaJoe
credit score helpcredit score ratingscredit score reportsfico credit scoreunderstanding credit scoreunderstanding my credit scoreunderstanding your credit score
True or False?
Even if my credit score is good enough to get credit approval, I still need to be concerned about my FICO credit score level.
True.
In addition to approval, the lender can use your credit score to determine the interest rate charged for your credit card, car loan, mortgage, etc. The difference between a 650 and 750 credit score could result in thousands of dollars over the course of a car loan, or tens or thousands of dollars for a mortgage.
Remember, if you’re not working the system, it’s working you.
PapaJoe
understanding credit score
True or False?
Even though I pay my bills on time, I still have to check my credit report at least once a year?
True.
Errors on the credit report, especially errors indicating late payments or defaulted credit can severely affect a credit score. Most experts agree that errors in credit reports are very common. And some estimates have the error rate as high as 75%.
According to a July 2004 report by the US Public Interest Research Group, 25% of the reports contained errors that are serious enough to result in a denial of credit.
Remember, if you’re not working the system, it’s working you.
PapaJoe
credit score helpcredit score reportsfico credit scorepersonal credit scoreunderstanding credit scoreunderstanding my credit scoreunderstanding your credit score 