The Personal Credit Maze
It’s too often in life that we find ourselves not paying attention to the details. I personally have been in that same situation many times in life. All you can do is learn from your mistakes right? I realized paying attention to the so-called little things can have enormous impacts on our lives.
Let me start with this analogy. If you were summons to court with no documentation would you go? Does that make you guilty if you don’t show? Are you left liable for anything down the road? Much like this situation the Personal Credit Bureaus report information on consumers that may or may NOT be correct. Along the line of the being sued with no paperwork scenario, the credit bureaus have no actual proof showing the consumer actually to have that information reported on their credit profile. This can be stopped there is a way to leave all that bad reporting in the rearview mirror.
I have a quick story to share, this involves a friend of mine. Before he entered into the program he decided he could find his way through the credit maze himself. He thought “I don’t need anyone to help me do it”. Wow was he wrong. What happen was he pulled his reports and noticed that he had some items reporting that didn’t belong to him. At that time in his life he was building new credit so he didn’t have any other open lines except the information reporting that was incorrect! He went ahead and filed a dispute after many hours of trial and error trying to get that far. After a few weeks and tireless hours which he didn’t have to spare) the credit bureaus removed the positive reporting incorrect information and well his score dropped 14 pts. Not a huge drop but not understanding the credit maze I learned the hard way what can and can’t affect your score.
Let’s talk about the 5 things that make up your credit score:
1) Payment History – 35% of your total credit score is based on payment history. Repayment of past debt is one of the leading factors that create your credit score.
2) Credit Utilization – 30% of your credit score is based on the percentage of available credit the individual has borrowed.
3) Length of Credit History – 15% of your credit score is based on 2 key things: the length of time each account has been open and the length of time it’s been since it last been utilized.
4) New Credit – 5% of your credit score goes into how much new credit you have. Applying for too much credit can flag you and make you look financially unstable to lenders. Only if you can see if fit financially or when it makes sense should you apply for new credit.* Remember inquires whether denied or approved still leave a lasting mark on your personal credit score*.
5) Mix of Credit – 5% of your credit score goes into you mix of credit. Experts say that by making on time payments with different vendors shows lenders you’re simply less of a risk. Once again Good behavior Gets Rewarded.
Learn how you can obtain the profile you need to go up against lenders and get the answer you deserve. Learn how to fight back and understand what it is you need to do to stay on track and maintain. We understand each situation is uniquely different! Start to make the change today.
All the Best.