What is Credit Card Utilization Ratio?

May 24, 2014 | Posted by Blair Warner | No Comments

Credit Scores Are Effected by Your Credit Card Spending Habits

credit cards Arlington, Fort Worth, Dallas, Texas There is a lot of confusion around how credit scores are effected by one’s credit card use. In fact, most of us don’t think about any particular strategy or method to buying things using credit cards except not to go over the limit and to make our payments on time. Have you heard of revolving debt ratio, or credit utilization ratio? In today’s post, an often misunderstood concept of revolving credit utilization ratio will be clearly explained so that your credit profile from month to month is looked more favorably upon by FICO, and thus, optimize your score.


First, revolving credit is a unique type where you are given what is also called a line of credit. This means you are given a certain maximum amount of credit that can be used anytime and is replenished each time you pay it back, making it available again for use. (Dictionary.com definition here). The most common example of this type is credit cards.

Revolving Debt Ratio

Revolving debt ratio as applied to credit cards is simply the ratio of the amount which has been used (charged) on a particular credit card at the time of calculation to that card’s maximum available credit. For example: If you have a card with a $5000 credit limit and you have used $1000 on purchases, then your utilization ratio for that card at that current time is 20% ( $1000/$5000 = .20 , or 20%). This would apply to business lines of credit and home equity lines of credit the same way. Tweet This Example

Why is this important, you might ask? FICO has said on their website that revolving debt ratio is one of the factors it considers in calculating your score, and can account for up to 30% of your FICO score calculation. The the lower the ratio, the better one’s score is, and the opposite is true, of course, the higher the ratio, the lower one’s score. The common phrase “maxed out” comes to mind. When credit cards are maxed out, that means all available credit has been used and a 100% utilization ratio has been reached. FICO “penalizes” consumers for maxing out because it shows they possibly rely on borrowing too much (or are in too much debt), and/or may not be the best credit and debt managers.

FICO does consider other aspects of credit utilization ratio on your credit profile to some degree, like how many accounts have balances, and even installment loan utilization ratio, but revolving debt ratio is by far the most important and easiest to influence when trying to optimize your credit score.

Clear as mud? Please feel free to ask us any questions you may have on this subject.

Has this been helpful? Please feel free to comment or share on social media. We like helping people.

Tweet for creditTweetable Takeaways Include:

  • In today’s post, an often misunderstood concept of revolving credit utilization ratio will be clearly explained. (Click to tweet)
  • When credit cards are maxed out, all available credit has been used and a 100% utilization ratio has been reached. (Click to tweet)
  • Revolving debt ratio is by far the most important and easiest to influence when trying to optimize your credit score. (Click to tweet)

By Blair Warner – Upgrademycredit.com Chief Editor and Sr. Credit Consultant

How Not to Improve Your Credit Score

May 9, 2014 | Posted by Blair Warner | 1 Comment

stop doing these things to repair your credit

When asked what is the best way to improve your credit score most people would answer that paying your bills on time is a good thing. A recent survey conducted by VantageScore Solutions and the Consumer Federation of America supports that If they don’t know anything else about credit and debt management they at least know this basic, somewhat commonsense key to good credit. This one important practice applies no matter which particular scoring model is used. For example, FICO has indicated that as much as 35% of your FICO score comes from payment history (which includes making your payments on time). However, all you have to do is search the web and a plethora of advice pops up that quickly can feel overwhelming. Not all of it is good advice, either, and, frankly, could hurt your score rather than boost it.

STOP, BEFORE YOU DO THAT!

Here are some actions to avoid if your goal is to improve your credit.

1. Keeping a Running Balance

It’s a common misconception that carrying a balance on your revolving credit like credit cards will help your credit scores. (Tweet This) Many well meaning people tout that FICO likes to see a running balance on your credit card account and will “give” you more points toward your score if they see a balance at the time of score calculations. It’s a myth. Proponents of this thinking go like this: The purpose of credit cards is to buy things on credit (meaning borrowed money). It’s the convenience of buying something now, and paying later. Credit card issuers make their money on the interest they charge for you to use their money, so to speak, and they don’t start charging interests unless a balance is carried over from one reporting period to the next. Makes sense for the bank to hope you carry a balance. If a cardholder pays their balance off each month, the bank does not make any money. Likewise, say these myth propagators, FICO does too, and rewards you for carrying a balance. Read my lips: IT’S WRONG.

For scoring purposes, it’s different. FICO is not concerned if there is a balance, per se, but rather, they ARE concerned with your utilization ratio – how much you use compared with your credit limit. The less it shows you have used of your available credit when they take a snapshot of your credit activity, the less the ratio is and the better it looks to their score algorithm, thus, a higher score. Understanding revolving debt ratio is important to understand because it contributes to as much as 30% of your FICO score.

Running a balance in order to raise your score has the added risk that you will use more and more of your available credit, and coupled with interest charges, just puts you more in debt.

2. Buying Unnecessary, Often Large, Items on Installment

We all know that you have to have credit to get credit, and, therefore, must use credit, but one of the biggest mistakes we make when using credit and especially for the purpose of building good credit is to succumb to the “buy now, pay later” temptation and buy things we don’t really need now, on a type of credit called installment loans. Installment loans as a loan type are the least important type of credit for building your credit score. It only contributes toward 10% of your score, and even then, not directly but only as a part of what FICO calls one’s mix of credit. Additionally, it increases your indebtedness for the entire length of the loan term. Don’t go out and buy that large screen T.V., or car, or new living room furniture on installment if you can wait, and especially if you are in a credit building phase.

3. Closing Old Accounts

There are finance “gurus” preaching that the best thing to do is just pay cash for everything and forget about credit saying, “if you can’t afford to pay cash you don’t need it”, and then commence to advise their listeners to cut up their credit cards. This advise sounds good on the surface and in theory would be nice, but it is short-sighted, and forgets that even if the only thing you ever do on credit is get a mortgage to buy a home, you have to have credit to get credit – not to mention mortgage lenders like to see 2-5 open trade lines for mortgage approval. Since FICO considers the length of credit history as one of the determining factors in calculating your score, don’t indiscriminately go on a card-closing-frenzy.

By Blair Warner – Sr. Credit Consultant


Photo Credit: © Brunofoto | Dreamstime Stock Photos & Stock Free Images

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Is Wells Fargo Getting Back Into Subprime Mortgages?

February 21, 2014 | Posted by Blair Warner | No Comments

Wells Fargo is testing the waters of subprime mortgages again. Will it make any difference in today’s real estate market? Tweet This Tweet: Wells is testing the waters of subprime mortgages again. Will it make any difference in today's real estate market? http://ctt.ec/d3en5+

Wells Fargo Subprime Mortgage Loans We at Upgrade My Credit like to keep you up-to-date on the mortgage and real estate industry. Today, we highlight some interesting news in the subprime market. Most people know that what is now non-affectionately called the mortgage crisis and credit crunch began toward the end of 2006 and “blew up” in 2007, effectively ending all subprime lending overnight. It was a disaster waiting to happen, and understandably so. People were buying homes who should not be, or, at least buying homes they could not afford.

Wells Fargo, then and now is a leader in the mortgage lending world, and is again leading the way, testing the waters of subprime mortgages, except this time with caution and armed with lessons learned from the past. Below is an excerpt from an article going into more depth.

Excerpt from an article at Credit.com

“Wells Fargo is once again setting sail on subprime mortgage waters, despite how choppy they were several years ago. The bank will consider mortgage applicants with credit scores as low as 600, announced Franklin Codel, a Wells Fargo mortgage executive. Previously, the minimum was 640, and this change applies to purchase mortgages to be guaranteed by the Federal Housing Administration.”

Read full article here…

This could be a good thing for the lagging real estate industry which has been trying to “recover” from the fall out of the mortgage and credit crisis of 2006 -2008. What do you think, is it a good move to lower credit score requirements for buying a home? Is it too soon? Will it stimulate home buying, or is the economy still too fragile?

Let us hear your thoughts, and feel free to share on your social networks

Bad Credit Scores Costs You Money!

October 28, 2013 | Posted by Blair Warner | No Comments

A Great Credit Score Can Save You A Lot of Money

A good credit score can save you money!Have you ever considered how much Money You can Save by having a Great Credit Score?

If you currently have low credit scores, you may be wondering if you should pay money to improve your credit score. Well, I’ll let you in on a little secret: if you ever get any kind of loan, you will make your money back many times over!

The reason is simple. Creditors of all kinds will charge you more – sometimes much more – to borrow money if you have a low or even a fair credit score.

Having a 720 credit score instead of a 640 score could save you thousands or even tens of thousands of dollars. Yes, it may seem unfair, but that’s the reality of the lending world.

As someone who has 12 years of experience in the lending world as a loan officer and manager, and now the editor of MyMortgageInsider.com, I could tell you countless stories of how people have saved tons of money by having great credit.

Let’s look at an example, taken straight from today’s rate sheets: Someone with a 720 score could get a $200,000 loan with a principal and interest payment of $1013 per month and a rate of 4.5% (4.652% APR)*.

The same person with a 640 score would pay $1073 per month and have a 5.0% interest rate (5.155% APR)*. The borrower with a 640 score would pay an extra $60 per month and an additional $21,700 in interest over the life of the loan!

How does that fee for credit repair services look now? Pretty low?

The bottom line is this: lenders want to see that you are a low-risk borrower. And it all comes down to the three little numbers on your credit report. The higher those numbers, the less you will pay for credit.

And a home mortgage is just scratching the surface when it comes to the money you’ll save by having a good credit score. Some other things you’ll save money on are:

    Car insurance
    Homeowner’s insurance
    Renter’s insurance
    Auto loans
    Credit cards

Heck, many employers look at your credit reports when you’re applying for a job these days, and some may even look at your credit scores! What if your bad credit cost you a great job? Reference NYTimes article on this subject.

When you add up all the money you could save and make over your lifetime by having a great credit score, the dollar amount could easily be six figures or more. This is no exaggeration.

Yes, it may seem like a lot of work to build, improve, and maintain your credit score. It takes a lot of discipline. But it’s that discipline that lenders are looking for. It proves you are a worthy candidate and will pay back the loan according to the terms you agreed to.

So if you can get help from an expert to improve your credit score, take that opportunity despite the time, cost and effort. You will get huge returns on your investment – more than you probably ever expected.

*Payment does not include taxes, insurance, or HOA dues. Rates are as of 9/10/13. Purchase price $250,000, loan amount $200,000, property in WA. Scenarios are 30 year fixed conventional loans.

by Tim Lucas – MyMortgageInsider.com

Tim is the Editor and Chief Contributor to the website MyMortgageInsider.com. He has been in the mortgage industry for more than 12 years as a loan originator and mortgage processor. He’s answered just about every kind of mortgage question over the years and has tons of experience to draw from. Please Send Mortgage Questions to: tim@mymortgageinsider.com

Has this been helpful? Please feel free to comment or share on social media. We like helping people.

Tweet for creditTweetable Takeaways Include:

  • Having a 720 credit score instead of a 640 score could save you thousands or even tens of thousands of dollars. (Click to tweet)
  • Lenders want to see that you are a low-risk borrower. And it all comes down to the three little numbers on your credit report. (Click to tweet)
  • Most employers look at your credit reports when you’re applying for a job these days! (Click to tweet)



Blair Warner – UpgradeMyCredit.com Editor & Chief Credit Consultant

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Can you really get your credit report for free?

July 28, 2013 | Posted by Blair Warner | 1 Comment

“What’s this about free credit reports? I have gone to several websites like freecreditreport.com and creditchecktotal.com, even CreditKarma.com thinking they offered free credit reports and scores. It seems they are not really free, and some include scores and others don’t. Credit Karma doesn’t even give you your real credit reports! It’s confusing!”


Get Your Free Credit Report and Credit Scores pic

Free credit Reports! Hhhmmm… really?


The above quote is what someone who called in from our website said almost word-for-word. Unfortunately, she is right. There is no free lunch, as they say. The sites she mentioned, and many more, are not really free, even if the word “free” is displayed somewhere. Furthermore, it is not always clear what you are getting. Creditkarma.com, for example, gives the impression you are getting your credit scores and reports, but in reality they have their own “credit management” platform that does not include your real credit report, only partial information pulled from it. In my opinion, it is this small word free coupled with credit reports or credit scores that throws people off because they have heard that you can get your credit reports somewhere for free. There is only one place where your credit report is 100% free, with no bait and switch, or “small print”, or a catch. More on this in a moment.

Here’s how they work:
Except for sites like creditkarma.com, here’s how most of them work. First, in various catch phrases and combinations of products offered (read each carefully), they tout in big print that you get credit scores and/or credit reports from all three credit reporting agencies, Transunion, Equifax and Experian , with call to action buttons saying things like “Try it Free”, or “Get Started Now” and “Click Here to Start”. However, usually in small print, they state it is a free trial for 7 or 14 days. At the end of the free trial you are immediately transformed into a monthly credit monitoring customer, which costs between $14.95 and $29.95 per month, depending on the company. The ones that only give a 7 day trial are particularly tricky. Your reports aren’t usually available for 3-4 days due to “processing”, which gives you 3 days to view it. There hope is that you will “accidentally” pass the 7 day mark without cancelling the trial. As a rule, it is my opinion to avoid the 7-day offers. If you don’t cancel within the 7 days, they immediately charge you their monitoring fee. Additionally, needless to say, it is not always easy to cancel.

Tip:  Some offer a printer-friendly version. if you print it out immediately,         and make sure to call to cancel, then, depending on the site’s offer, you         could actually get a free credit report.


Credit Karma is truly free, but you don’t really get all your reports and scores, only ONE score, as mentioned above, and their proprietary credit management platform. Credit Karma is, in my opinion as a credit consultant, useless, and useless translates in my book as a gimmick, of sorts, because customers think they are getting something useful. (Update 6/14/15: Since the writing of this original post, Credit Karma now offers scores and reports for two of the big three credit reporting agencies, Equifax and Transunion. They still don’t offer information from Experian. Keep in mind that the scores they provide are NOT your FICO scores).

The ONLY place you get a free credit report without pitfalls to avoid, and hoops to jump through is AnnualCreditReport.com. The Fair Credit Reporting Act (FCRA) requires the there major credit bureaus to provide one free credit report per year. You can get one at a time each quarter, or all three at once, once each year. Keep in mind, though, that this does not include scores, FICO nor VantageScores. Go here for a comparison of the FICO Score and Vantage Score. Most lenders use FICO, especially mortgage lenders.

Our favorite paid site is Privacyguard.com and instructions for pulling your credit so that we can give you a free credit report evaluation can be found here. You get all three full reports, and all three VantageScore credit scores. Privacyguard.com gives you a 14-day trial for free, and then only costs $19.95 per month for monitoring. Monthly monitoring is not necessary all the time, but we do recommend it if you are in credit repair and re-building phases, or looking to do something requiring credit in the near future. (We are NOT affiliated with privacyguard.com)

Has this been helpful? Please feel free to commment or share on social media. We like helping people.

Tweet for creditTweetable Takeaways Include:

  • There is only one place where your credit report is 100% free, with no bait and switch, or small print (Click to tweet)
  • The Fair Credit Reporting Act (FCRA) requires the three major credit bureaus to provide one free credit report per year. (Click to tweet)
  • Most lenders use FICO (credit scores), especially mortgage lenders. (click to tweet)

By Blair Warner

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Perkstreet Financial Reward Debit Card

July 23, 2013 | Posted by Blair Warner | No Comments

A Debit Card For Everyone

Perkstreet Financial for better credit Who would have thought 10 or 15 years ago that debit cards would become the most popular way to pay for purchases? I grew up in an era where cash was king, and you primarily used checks to pay for bills that where paid via mail. We used checks because everyone knew you didn’t put cash in the mail. Some people liked to carry checkbooks around with them, but to me it was one more thing in my pocket and too many places said “No Checks Allowed”. Today, I hardly carry cash, and prefer to pay by debit card even if I do have cash on me. Why?

There are many reasons, but here are a few:

  • Convenience. debit cards fit nicely in my wallet.
  • No more “No checks allowed” signs to get in the way. Debit cards are accepted everywhere.
  • You get the convenience of a credit card without the debt.
  • You get a record of all your expenditures for budgeting and reconciling purposes.
  • You can use it for online purchases like a credit card.
  • If it gets lost or stolen it is easy to freeze it, or cancel it and get a new one.
  • My favorite, many banks offer rewards for using them.

Most, if not all, banks now offer debit cards to use with your current account at that bank. It is, basically, an extension of your account, like checks. However, not all debit cards are created equal, and, like many of my clients in credit repair and debt reduction plans, not everyone can open a standard checking account at their local bank down the street due to low credit scores. (banks do check credit before opening a new account). Problem solved! The debit card I use myself and recommend to everyone is Perk Street Financial Debit Card.

I recommend all my clients in Upgrade My Credit’s credit repair and transformation program to use Perk Street Financial Debit Card, especially if they don’t already use one. There is no credit check, for one thing. And zero fees – not even checking account maintenance fees. Nada! (click here for FAQ on fees).

To see all the wonderful benefits of using their card Click for Perk Street Debit Card >>

By far, the best part of PerkStreet Awards Debit Card is the rewards and perks. They pay you to use it.


Image from their websitePerk Street Cash Back Rewards Debit Card

Check it out and let me know what you think. Do you already use their debt card? Please share in comments below.


By Blair Warner – Credit Transformation Coach

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Don’t make this credit mistake!
credit cards Arlington, Fort Worth, Dallas, Texas
This is going to be a really short post, but one of the most important you could read concerning maintaining, or building a good credit score. What is the worst mistake people routinely make related to their credit and credit reports? You may be surprised, for it is not obvious, and on the surface actually seems like a good thing to do. In fact, most people make this mistake when actively trying to rebuild their credit scores, and reduce their debt, making it very frustrating, to say the least. Click to Tweet

What is this mistake? drum roll…..Closing credit card accounts. Go ahead, admit it. You have thought about it at least once, and understandably so. For a lot of us, it’s those darn credit cards that got us in trouble in the first place, (so we like to say). Therefore, why not just close them and cut them up? That’s what some of the financial and money management gurus on the net will say. Depending on your financial situation and goals, for most of us there is a very important reason you don’t want to close out your credit card accounts, especially if your goal is to repair and build your credit score. If you have other goals, like getting out from under an ill-controlled mountain of debt, and curtailing credit card spending, then you will want to talk with a credit and debt counselor first to put in place a comprehensive money management plan, including a budget. For this particular credit blog post with emphasis on credit score repair and building, closing out your credit cards could be a mistake. I am going to direct you to a well written CBS article by Adam Levin of credit.com that does a great job explaining why you don’t want to make this most common credit mistake.

Go here for the CBS News article

Check out this previous article for more information on How FICO Scores Are Determined

It is our sincerest desire that you found this article helpful for your journey to restoring your credit and reducing your debt.

By Blair Warner and the Upgrade My Credit team.

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5 MORE Things You Should Stop Doing For Better Credit

June 14, 2013 | Posted by Blair Warner | No Comments

Last week we looked at 5 Things to Stop Doing For Better Credit. We had so much response on various social media networks like Google+ and Twitter, that we decided to share with you 5 MORE Things You Should Stop Doing For Better Credit.

These first 5 things plus the 5 more below will set you on the path to credit restoration and better scores.

1. Stop waiting for a better time
2. Stop blaming others and whining
3. Stop not planning and setting goals
4. Stop making your payments late
5. Stop robbing Peter to pay Paul



Stop doing these things for better credit scores

6. Not checking your credit report regularly
Knowing what is on your credit reports is key to having and maintaining good credit scores. With the advent of the Fair Credit Reporting Act (FCRA) years ago primarily put in place for the purpose of helping and protecting consumers there is no reason not to take advantage of the very important provision for every person to get a free credit report from each of the major credit bureaus, Transunion, Equifax and Experian once a year.The official site for getting your free credit reports is http://annualcreditreport.com. It is the only truly free credit report provided by the 3 major credit reporting agencies. Watch out for Free Credit Report advertisements that aren’t really FREE, not even http://freecreditreport.com . Note, http://annualcreditreport.com does not provide credit scores, FICO Score nor Vantage Score. Start checking your credit reports regularly.

7. Spending money on things you don’t need
I would be the first to admit that we often mistake the “I want” for “I need” when buying stuff, often because it just seems cool to own it. The saying “You can’t buy happiness” is a true statement. Things don’t last long; when you first get it, you experience a certain joy of a “a new toy”, but not long afterwards, the joy is gone, the newly acquired item is no longer new, and joins the rest of things in your house– or in a garage sale. Think very carefully whether you absolutely need something or you just want to own it. There is a time for buying unnecessary things, but not when you want to get out of debt and improve your credit score. Quick encouragement: Invest in experiences instead things– experiences that will stay with you in memory for the rest of your life.

8. Depending on others for change
I was talking to a Realtor the other day, and she was talking about some of her production goals for 2013. Actually, to be more precise she was complaining. She was describing how she and her partners had set down together in December and mapped out some goals and plans for the new year. It is now May, and they are nowhere close to being on schedule. I asked her why, and she replied that her partners were not doing their part. Essentially, she was waiting on them; She was depending on them for change. Granted, when you are a part of a group or team, others’ activities or lack of activities will effect you, but you must resist the temptation of depending on, or waiting on others for real change. The same applies to improving your credit and debt circumstances. Take the bull by the horns and make things happen to the best of your ability. Even if you have to hire help from a credit repair company, you still are taking initiative by reaching out to them and then doing your part in the process.

9. Not taking chances
take a riskSometimes we wait for a sure thing to come along for us to follow and then, when it never comes, we wonder why nothing wonderful and exciting ever happens to us. It’s true not just in regard to life in general but also important things like one’s credit. We often overthink, overanalyze and create possible scenarios in our head – then come up with the most negative outcome, and end up never trying anything at the end of the day. We are afraid to take a chance. If you want to improve your credit rating, you must be willing to take a risk. If you are truly afraid of something going wrong, ask yourself: “What is the worst thing that can happen?” and if you can live with that worst case scenario – maybe you should give it a try. Naysayers will try to discourage you, but if you know it is right, go for it!

10. Asking for help
Most of us resist asking for help until we are desperate, especially we independent, do-it-yourself (DIY) Americans. When we have gotten to the end of our efforts and pride we finally consider asking for help. If you want to have better credit scores, stop not asking for help when needed. Granted, there are many things you can do to improve your credit yourself, and really should. It’s your credit, your future. In fact, the consumer credit laws like FCRA and FDCPA were put in place to not only protect consumers, but empower them to have more control over their credit and financial life. However, there are times and situations where you feel like you are in the credit pit, and can’t get out, or you just flat don’t have time with all that is on your plate. it is best and easier to let people who have specialized training and experience help you.

Don’t let pride get in the way of your goals and plans. If you need help, ask for help from a reputable credit repair specialist.


Improve Your Credit Scores By Stopping these 5 Things:


1. Waiting for a better time
There is never a good time to start something.. yet it is also true that often there is never a better time than the present. With the myriad of activities vying for our attention and time these days, admittedly, working on improving one’s credit score is not the most exciting option. However, we usually make time for things that are important to us. Is it important to you repair and improve your credit scores, stop waiting for a better time. The time is now!

2. Blaming others and whiningKeep Calm Stop Whining - repair your credit scores
This may sound harsh, and it is not the intent at all, but if you want to improve your credit scores, blaming others and whining about your credit woes is NOT allowed. You can blame your spouse, or ex-spouse, your parents, the government or economy, the list goes on, but it won’t change a thing. No crying over spilt milk. Take responsibility and move on with a plan to change the future. Nuff said.

3. Not planning and setting goals
Failing to plan, is like planning to fail. If we don’t set credit improvement goals, not only can we expect to not get far, but how would we know if we have arrived? We can’t control everything. Life has the tendency to decide some things for us and take us down routes we never thought we would ever consider for ourselves, but don’t let it dictate everything. We have a certain power to influence our future. Having a specific plan for better credit scores, even if not complete, at least sets you in a direction of achievement and is a guide of sorts for a better tomorrow. We often give up and just let events take over, but reacting all the time is not the same as acting of your own free will with a specific plan to improve your credit standing. Take control, set targets and get a strategy, because just living the same way that got you here won’t work. For some tips on how to do that click here.


NOTE: These last two are very important to improving your credit scores.                Without them it won’t happen.

4. Making your payments late
In just about every article one reads about credit repair and credit rebuilding the admonition to make your payments on time as the best way to get good credit scores is abundant. The reason is that 35% of FICO’s credit scoring model is based on payment history. There is no getting around it. The good news, though, is that FICO also weighs most heavily on the most recent 12 months’ history, which means it is never too late to start making your payments on time and turning the corner from back credit to good credit. Start this month never making late payments and watch your credit score rise!

5. Robbing Peter to pay Paul
While writing this post, my daughter asked me to explain what this idiom means, and after explaining she asked me “why Peter, and why Paul?”. I didn’t have an answer for her except that it must mean that it is a very old idiom. This means this concept of taking, or borrowing from one place to pay your debt somewhere else goes back ages. It doesn’t work, though, for it is essentially an endless cycle. You never get out of debt. Rarely does this series of activities bring about a positive benefit. If you find yourself in this never-ending rut, stop it. I know it is easier said than done, but a plan must be put in place to be ruthless with yourself, and find a different way to satisfy your debors. A better solution is the snowball debt reduction method.


Helpful Online Resources for Getting Out of Debt
->> The Snowball Method of Paying Off Debt.
->> Snowball Method Tools, spreadsheets, calculators. – GO HERE….



By Blair Warner

credit report imageThere are a lot of myths surrounding credit scores and how they are calculated, or, put another way, what information is and is not considered in your credit score. Credit scores are based upon information on the credit report. This is the only information used to calculate scores, and predict credit behavior. Since there is often confusion of what is and what is not used in credit score calculations, below should help out a lot.


Which data is and is not included in a credit report?

Personal Information such as name, address, date of birth, Social Security Number and employment data (where you work(ed) only) are included.

Account information. Account information includes loan amount, credit limit, balance, payment dates, payment rating and history, to name a few.

Collections by 3rd party collection agencies.

Public records like judgements, tax liens, bankruptcy, etc. are reported.

Inquiries, when and where, but not for how much, and why you applied for credit. Inquiries initiated by you are called “hard” inquiries, which are results from applying for new credit such as credit cards, vehicle loans, mortgage, etc. Go here for more on inquiries and the myth surrounding their impact on your credit score.

Information NOT included in credit reports:

No salary or income history whatsoever is included

Medical history is not included, although medical collections via a 3rd party collection agency may be.

No arrest or criminal records are reported.

Property tax records are not included.

Insurance premiums or insurance claims are not reported.

Personal information like gender, marital status, race, religion, nationality, political affiliation and personal lifestyle is not a part of your credit reports.

Payday loans (unless in collection), debit cards and prepaid debit cards are excluded

Inquiries initiated by you online, called “soft inquiries” are not reported and have no effect on your credit score.

Financial Institution accounts like checking accounts, savings accounts, CD’s, or investment accounts. NSF checks will appear if sent to collections.

While some of the above information like income and assets may be considered by lenders such as mortgage banks, and auto finance companies, etc., in their decision process, you need only be concerned about the information that is reported on your credit reports as far as your credit score in concerned. Information not reported on your credit reports does NOT impact your credit score.

By Blair Warner (see About US page for more info.)

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