Five Credit Score Facts You Should Know
It seems like everyone today has a different idea of what affects your credit score and what doesn't.
Part of the problem is that credit bureaus won't make the formulas the use to determine credit scores available to the public.
An even worse cause of this is that there are companies and people out there that want to cash in on this misinformation.
Well, if you've got any questions regarding your credit score, these little-known facts should help.
1.
When A Couple Applies For A Loan, The Lower Of The Two Scores Is Used.
Even if you have a perfect credit score, if your spouse has bad credit and you apply for a loan, their lower score will be the one used to determine the loan's interest rates.
2.
You Should Always Apply For Credit Under The Same Exact Name.
If you apply for different forms of credit under different variations of your name, you risk having your credit information divided among those names instead of united under a single one.
Even worse, you risk having part of your credit history merged with someone else's information, or theirs merged with your own.
Always be sure to use your full given name, your middle initial, and if you are a Jr.
, be sure to include that.
That being said, if you change your name when you get married, immediately begin applying for credit using your new name.
This increases the chance that your credit reports will contain errors, but those errors can be fixed, and your new name will stay with you forever.
3.
Your Collection Accounts Don't Stay On Your Credit Reports.
Collection accounts only minimally hurt your credit after two years, and after four years, the damage is practically erased.
After seven years, a collection account is wiped completely from your report.
4.
There Are Credit Cards Specifically For People With Bad Credit.
If you have bad credit, chances are that you won't qualify for traditional credit card accounts.
One option available to you is to open a secured account.
This type of account requires you to pay a deposit that is greater than or equal to the card's balance.
In this way, you are not really getting the full benefits of a credit card, as you are basically paying before you can use the card, then paying again once you've used it.
The initial deposit, however, is completely refundable, and after 6-12 months of proper use, you can ask the credit card company to refund the deposit and turn the secured card into a regular one.
Keep in mind, though - a secured card only benefits you if the issuing company reports to all three major credit bureaus, so make sure they do before you sign up! 5.
You Can Use Technology To Help Keep You In Good Standing.
If you are one of those people who are always struggling to pay their bills on time, there is hope for you! Sit down with your bills and create automatic payments on all of your credit cards, mortgages, installment loans, and finance accounts.
This way, you protect yourself from forgetfulness, being too busy to pay your bills, and even from compulsive overspending.
Part of the problem is that credit bureaus won't make the formulas the use to determine credit scores available to the public.
An even worse cause of this is that there are companies and people out there that want to cash in on this misinformation.
Well, if you've got any questions regarding your credit score, these little-known facts should help.
1.
When A Couple Applies For A Loan, The Lower Of The Two Scores Is Used.
Even if you have a perfect credit score, if your spouse has bad credit and you apply for a loan, their lower score will be the one used to determine the loan's interest rates.
2.
You Should Always Apply For Credit Under The Same Exact Name.
If you apply for different forms of credit under different variations of your name, you risk having your credit information divided among those names instead of united under a single one.
Even worse, you risk having part of your credit history merged with someone else's information, or theirs merged with your own.
Always be sure to use your full given name, your middle initial, and if you are a Jr.
, be sure to include that.
That being said, if you change your name when you get married, immediately begin applying for credit using your new name.
This increases the chance that your credit reports will contain errors, but those errors can be fixed, and your new name will stay with you forever.
3.
Your Collection Accounts Don't Stay On Your Credit Reports.
Collection accounts only minimally hurt your credit after two years, and after four years, the damage is practically erased.
After seven years, a collection account is wiped completely from your report.
4.
There Are Credit Cards Specifically For People With Bad Credit.
If you have bad credit, chances are that you won't qualify for traditional credit card accounts.
One option available to you is to open a secured account.
This type of account requires you to pay a deposit that is greater than or equal to the card's balance.
In this way, you are not really getting the full benefits of a credit card, as you are basically paying before you can use the card, then paying again once you've used it.
The initial deposit, however, is completely refundable, and after 6-12 months of proper use, you can ask the credit card company to refund the deposit and turn the secured card into a regular one.
Keep in mind, though - a secured card only benefits you if the issuing company reports to all three major credit bureaus, so make sure they do before you sign up! 5.
You Can Use Technology To Help Keep You In Good Standing.
If you are one of those people who are always struggling to pay their bills on time, there is hope for you! Sit down with your bills and create automatic payments on all of your credit cards, mortgages, installment loans, and finance accounts.
This way, you protect yourself from forgetfulness, being too busy to pay your bills, and even from compulsive overspending.
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