It is a good idea to review your credit reports once a year - or at least several months before applying for a loan, to check to errors, negative data, or any suspicious activity that may signal identity theft. To obtain your annual FREE copy of your credit report, visit Free Annual Credit Report
A Credit Report Is Not the Same as a Credit Score. A credit report basically represents your financial history over time. A credit score is a snapshot of your credit profile at a particular time.
Credit Scores are not stored in your file. Rather, they are generated on request as they can change from day to day, depending on the latest information in your file.
The measurement that most lenders use to assess applicants' credit risk is the FICO score developed by Fair Isaac Corp. The score ranges from 300 to 850.
And, there is not just one FICO score. Buyers have three: one from each of the three chredit bureaus, Experian, TransUnion, and Equifax. Each credit score is based on information the credit bureau keeps on file. Since credit bureaus don't share their data with one another, the three FICO scores may differ, sometimes by as much as 100 points.
The components of a FICO score are: * Payment history: 35 percent * Amounts owed: 30 percent * Length of credit history: 15 percent * New credit: 10 percent * Types of credit used: 10 percent
A consumer with a 580 credit score might qualify under FHA requirements. However, in order to qualify for a prime loan, generally a borrower must have a credit score above 620 for a conventional loan and above 720 for a loan at terms and rates most borrowers would consider desirable.
You will have to pay a fee to get your credit scores. Equifax offers you one FICO score for an additional $7.95 when ordering your free report at www.annualcreditreport.com
THE THREE CREDIT REPORTING AGENCIES:
Equifax at www.equifax.com or 1-800-997-2493
Experian at www.experian.com or 1-800-397-3742
Trans Union at www.transunion.com or 1-800-888-4213
NOTES ON CANCELLING CREDIT CARDS:
There is always a right way and a wrong way to do things, and that goes for canceling a credit card.
Whatever your reason for getting rid of a credit card you will want to make sure you do it thoroughly and that no harm is done to your credit report.
Do not try to cancel a card while you are paying the balance. Cancel the card only after you have paid off the balance in full. You will have to employ self-discipline and stop using a card while you are paying off the balance!
Once you have paid off a card’s balance and you want to cancel the account, do so in the following order:
First, notify the credit issuer by phone: Your issuer’s customer-service number is usually printed on the back of the card, on the monthly statement, or both. Call that number, confirm that your balance is zero, and notify the customer-service representative that you wish to cancel the card.
Then follow-up the card issuer with a letter: Write a short letter to the card issuer after the phone call. If you have the name of the person you talked to, that is better. The letter should say that you are closing your account and that you want your credit record to reflect the fact that you requested that the account be closed. Provide your name, address, and account number.
Then wait a month. Get a (free) copy of your credit report and make sure it is accurate. Check to make sure that it says the account was “closed at customer’s request”. You do not want the report to say that the account was “closed by creditor” because that reflects negatively on you.
Repeat these steps if necessary…
If you know anyone who is thinking of selling, or purchasing a home, please contact me. I guarantee a service that will far exceed expectations.
As always, have an awesome week!
Real Estate Broker, Realtor ®
Certified Real Estate Specialist
Phone: (562) 857-4936
Broadmoor Realty, Inc.
5500 E Atherton Street Suite 310
Long Beach, CA 90815
DRE # 00552325