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Category: Credit Score

Pros & Cons of a Credit Score

What’s stopping your bank or lender from approving your application? It’s challenging to navigate around financial institutions given the bad credit score considering the fact of bad objects being listed in your credit report. Do not take this issue lightly when your creditors are claiming your personal assets while lenders inquiring with local credit bureaus on your financial standing. The best option is to understand the pros and cons of a credit score.


Pros of a credit score

Aiming to secure a new loan approval, apply for a new mortgage, buy a new car, or simply borrowing to invest, your credit score does make a difference. Do not be tempted to signup for fast credit score recovery services. A quick fix can never prove anything to your lenders but only jeopardizing your overall credit rating.


1. A credit score does improve your reputation.

The first benefit of having a credit score does improve your financial reputation. If your existing score is not zero or underwater, you’re in good hands because of proper guidance in handling your personal credit report. Your reputation definitely is important when it comes to lending money out to you.


A good credit score seems attractive to the eyes of your lenders. It’s imperative to continuously look out for the right credit fixes so as to attract your interested financial institutions – else risking for unwanted loan service providers. Reputational assets seemed to play a major role in banks considering the fact of loaning to the right people.


Improving your financial credence not only helps to look attractive, but also giving you an opportunity to negotiate with the right people. Many good credit scorers are invited to have a meeting with local bankers in creating new credit lines as well as improving the overall credit rating in the long run.


2. Speed up loan approvals with a good credit score.

Another distinctiveness of having an excellent credit score of 800 or 750 fetches higher bank approval rates. There is no limit or boundaries for an excellent credit scorer. Lenders always looked out for those who have excelled in positive payment history, long tenure in debt repayments, and strong financial backing.


A lender may offer to speed up your individual loans upon reviewing your credit report score considering the fact of having a good financial position. It’s an indication of you being a responsible person and willingness to repay outstanding sums. No lenders in the right mind will loan out mortgages or debt obligations to someone who has low creditworthiness.


Once your banker reviewed your good credit score likely above 609 or 750, he or she proceeds to send the credit card application & personal bank loans to the backend office for processing. Expect an interesting response of quick loan approval due to high quality credit score rating from any credit bureau’s inquiries.


3. Request for better interest rates with a good credit score.

If you’re a usual visitor to the bank, a shopping mall, a grocery chain, or traveling abroad, withdrawing cash advances overseas & using checks to make payments are not uncommon sights. This is an opportunity to request for a lower interest financing rates if you’ve an excellent credit report score.


Be brave enough to step up by renegotiating for better bank interests in your personal loan application, a mortgage refinancing deal (most important), and your existing high interest car loan. Every asset is equally useful to enhance cost savings over a long period of time so don’t take this issue lightly.


Not securing better interests from your local personal bankers? It’s time to hop over to another rival bank such as HSBC, Citibank, or AMEX for new banking applications. A good credit score does help in getting higher approval rates in loans and financing deals. You should not remain loyal if any of the banks do not treat you in a high-quality fashion.


4. Excellent credit score does offset balance transfer interests.

One good advantage of possessing an excellent credit score is the attention showered by your lenders. It’s a beauty when your balance-transfer accounts have the ability to compensate for any current accounts or credit card interests. A lower rate of interest charged to your personal credit card & bank loan is a good sign of quality credit score.


Trusted by your bankers, you can use the balance transfer interests credited to offset any incoming debited charges. This leaves you technically not needing to pay any interest on outstanding loans. At the end of every month, your balance transfer account will automatically deduct the credit card interests and monthly bills – giving you a hassle-free environment in dealing with more complex issues.


No one lender shall offer good financial products to a bad borrower. You’ve to ensure a timely payment as well as proper credit control on your credit report. It’s because banks do offer 0% balance transfer schemes to individuals having excellent credit scores. A difference of 50 basis points can significantly impact your choice of lenders and vice versa.


5. Secure employment opportunities with a good credit score.

Looking to be gainfully employed, a new career, upgrading individual employability, or a job hop, a good credit score fulfills this option. What?! When two potential candidates applied for the same job function, the employer will use your credit score as benchmark to determine who secures the job.


There are many reasons to justify an employment opportunity. Below are some of the commonly associated terms why employers chose someone with an excellent credit score:

  • Lowers risk of debt collectors & lawyers coming to the door
  • Reduces uncertainty on credit frauds or identity thefts
  • Perform optimally during an employment period
  • Ability to withstand immerse pressure instead of financial distress
  • Lock down for an extended period of time
  • Working diligently & focusing on the role
  • Not frequently taking leave to take care of credit problems

Similarly, any other organizations demanded at least an average credit score. Employees who faced challenges in debt repayments are subjected to certain clauses, thereby preventing employers from selecting them to perform dire roles, sometimes requiring employee income clearance & credit score calculations – an arduous task to consider in the long run.


Good to know about your credit score in year 2018

Regardless of the reasons above, a good credit score does help in good or bad circumstances (majority are positive). The rationale behind having a reputable credit report is due to the fact of letting your employers and lenders know they won’t need to face unforeseen conditions. It’s a debt relief at their end and closely observed the procedures for a safe credit score:

  1. Focus on repairing bad credit
  2. Pay up your bills in a timely fashion
  3. Never put up your credit info for sale
  4. Improve your credit score
  5. Ask a friend to help on credit checks
  6. Seek a credit inquiry & review
  7. Call your credit bureau near by
  8. Attempt to learn about a credit report during free time

These factors mentioned can assure a smooth endeavor in credit repair. The problem for most consumers is that they’ve the necessary tools such as a credit report, an update from creditors, and credit bureaus offering up to 3 times free reports to them. It’s just the inadequate knowledge that deters someone from reading a typical consumer credit report. Don’t be one of them but start educating on financial terms so as to file many disputes in getting a better credit score!


Cons of a credit score

Just as lucrative a credit score seems to be, it has a dual personality of having equally discouraging disadvantages. There is no end to the “demise” of someone’s badly tattered credit report. A mistake made or failed attempts in repairing a bad credit can easily put your financial position in great jeopardy. Check out the potential cons of a credit score.


1. No one promises a 100% fix in credit score.

Fixing your credit score is not guaranteed. One verified claim from a creditor or simply adding new current & credit accounts may increase your risk of improving your credit score. It’s not the easy way out of hiring a credit repair company to file many disputes to a credit bureau in hope of immediate rectification.


Sometimes, your creditors may rebut on your negative info claims by issuing official receipts of unpaid mortgages, outstanding loans, or missed payments. In doing so, the credit bureau officer shall take notice of several credit error disputes and oversee the entire process. Once the local government took control, it has full authority to determine the final verdict of who is to win credit report errors.


Knowingly on your end of being powerless in decision making, it’s practically impossible for you to risk an endeavor only to get rejected by local credit bureaus or even blacklisted by your lenders. This is risky at your end even if it is goodwill by trying to resolve certain bad disputes or managing your personal credit score account.


2. Having a credit score does not mean an outcome.

Most consumers got the misconception that having a credit score of 609 is better than a flat zero credit score (not to mention bankruptcy credit scores). While it is true to a certain degree, possessing a good credit score does not mean anything. The ultimate financial controller is the one who inks the deal on whether to finance your loan application or reject on a need-be basis.


If you’re ready to fix your credit report in a legal way, chances of improving your credit score will be higher. To your dismay, a credit score boost might not automatically secure a new mortgage loan, a personal loan, or an auto loan. Again, no one promises you anything when your score report depicts signs of hard work to improve overall financial status. The final say still depends on your bank’s decision.


A credit union does offer financial assistance to people. Assuming your credit score failed to obtain a new bank loan, you can use the reported credit score for reviews & seek credit unions for immediate aid. There might be a chance to get approved under certain strict regulations but no guarantee on any credit cards or loans again. No one has the ability to promise you a fixed success during a credit review.


3. Fluctuations on credit score during improvements.

One significant disadvantage of a credit report fix is volatility. In an event of hiring a credit repair company, fix a credit score report or file a potential discrepancy, you might encounter a jump or drop in your credit score. It’s a common sight to see some changes going on your fico scorecard but the change is not always a positive one.


Fluctuating credit scores don’t signify success! You’re in the midst of fixing a bad credit report while your creditors behind the scenes might be doing some “stuff” to file for legal credit dispute errors. Both parties are essentially countering each other claims & looking to offset certain laws in the short haul – likely benefiting the lawyers and financial institutions.


Indeed, there’re real cases of decline in credit score 609 to 550 even in the United States. It’s because the credit scoring agencies determine a negative credit rating on an individual’s profile for unpaid bad debts (written off). No major changes are to be made during the initial movement of a credit score.


4. Risk of getting rejected & downgraded.

Have you experienced a loss in credit score? Yes, many people underestimated the legal costs and implications behind improving their financial situations. Money is not the only variable in this credit repair equation. A local credit repair agency often chooses its customers on problematic credit fixes as there is low hope for clients who don’t pay for debt repayments – what more paying up for an agency contract in fixing bad credit.


One big risk is getting rejected by your lenders. An increase in credit score does not guarantee a bank loan approval or an upgrade in your credit report. In fact, being rejected is a common problem for most consumers as a fix in bad debts or report card is not the only criteria for banks & financial institutions to approve your credit card application.


Another risk is on downgrading of your credit score. High quality accounts don’t really face this issue, however. The only problem is an average credit score boosts to a good status may attract unwanted attention in rebuilding payment history only to assume more mortgage liabilities – last thing a lender wants in forcing into a “financial crisis”.


5. A boost in credit score is temporary.

The reason why some consumers leave their current blown credit score status is that they knew there isn’t any hope in boosting a credit score. A temporary increase in credit score does not justify financial institutions in finding your application attractive – banks do review hundreds of new lines of credit signups on a daily basis.


Since a temporary boost in credit score is not enticing, you might not express interests in investing time & efforts in rebuilding your credit report (let alone your credit score). But, come to think of getting a boost in exchange of a one-time limited effort is not exactly worth the risk in the long term.


Longing for some repeated efforts on a consecutive basis, your lenders might not want to do repeated transactions with you. A one-off effort is highly discouraged from any credit repair companies too considering the fact of bolstering a financial capacity for a short while more often than not faced great difficulties in future credit repair.


Good to know about a credit score in year 2018

After reviewing the above disadvantages about looking into your credit score, it does not mean the end of world in fixing your credit report. In fact, you should not discourage at all in doing necessary precautionary measures. A financial indicator is in position to help you in rebuilding the right way. Here are some useful tips in preventing a downgrade in credit score:

  1. Slowdown on your credit repair
  2. Focused one issue at a time
  3. Never apply for any guarantee
  4. Use an online credit score calculator (free)
  5. Learn the right way of calculating a credit score (paid)
  6. Hire a credit repair company
  7. Free up your existing credit utility ratio
  8. Perform regular debt clear up maintenance

Good things don’t appear for free. You’ve to undergo intense credit scoring tests & other forms of debt fixes before being eligible in affording a new financing deal from lenders or seek redress on unfortunate credit report errors. No one can promise you a credit score fix in the short run but sufficient efforts invested do increase the probabilities of success in attaining a bank loan – even without the need for a rise in credit score.


Quote of the Day: “A building does not establish by itself – KIG Hall [2013-2018]”


Relevant Topics

» Do’s & don’ts of credit score: Decorate your credit report nicely!

» What you need to know about a credit report: Final destination for a credit fix!

» What you need to know about credit cards: No money, no honey!

» What you need to know about credit repair: Never destroy your financial reputation!

» What you need to know about a credit score: Understand the reality of scoring models!


This article was originally published on February 20, 2014. It has since been updated. 

What You Need to Know About A Credit Score

Your creditworthiness is the most important factor. We’re facing an increase in credit consumption considering the fact of an inflation rate, a quality lifestyle, higher cost of living, bidding for time, growth of capital, or borrowing to invest. What are your reasons for using debts?

 It’s time to personally step-in in handling your credit file. In your to-do list, fusing together with your daily routine, proceed to make the right adjustments to prove your existence to the right people. Here are the top 9 reasons that cannot be denied…


1. You don’t have an actual credit rating; there’s no answer.

Depending on each lender’s credit scoring model, utilizing a broad range of financial indicators, the risk-taker assesses your credit file to see if you are the right match as a profitable customer. For those whose history is bad, often missed payments, delayed debt repayments, defaulted on loans, or not demonstrating financial competence, the lender might reject your application without providing the full reason. Check out do’s & don’ts of your credit score.


Examples: There are many credit rating agencies offering detailed credit checks. Vantage score 3.0 model & Myfico score model are two prominent scoring platforms for consumers to check their score cards. If you’re actively managing your credit score, chances of finding a different credit score between these two models are evident.


2. Boosting your credit score’s is like heading on adrenaline rush.

There’s no such thing as a universal credit rating for an individual. It’s important for you to remain attractive to lenders considering the fact of basic discrimination problem. Some people prefer to lend money to ladies due to meticulousness, others to guys for job security purpose, and remaining to the public for sentimental value. Yet, here are some easy changes to be imposed:

  • Job stability importance: A proper contact number is appreciated, existing & potential lenders wanted to call you at the soonest possible period.
  • Avoid cash advance: It’s hard on any creditor to trust you with borrowed money if you went beyond your credit utility ratio especially on unsecured loans.
  • Never missed a payment or default: One good method is to use a charge card whereby the security deposit or collateral deters you from borrowing more than what you can afford.
  • Check for credit info error: Demonstrate meticulousness in enticing lenders to contact you while being certain that you’re contactable in the contact list.
  • Impress your creditor/lender: Do yourself a favor, show up to fix your credit report & manage your credit score.

If you’re still unsure on means of attracting your lenders, check out the do’s & don’ts of a credit score. Be sure to observe the standard guidelines well and attract the right people in providing your with financial support.


3. Leverage on ex-bankrupt’s experiences.

Who does credit repair better than an ex bankrupt. If you’re trying to predict your fico score, plan for financial assistance, or to improve your credit score, the best way is to seek an ex-bankrupt’s advice. The bankrupted person may have a trick or two in handling bad debt negotiations especially from nasty creditors.


A bizarre idea is to seek remedies from a local credit score agency. It’s about $50.00 per month for a list of bad information removal, paying several bankrupts for critical info necessary to repair bad credit. There is no risk in hiring these freelancers while paying them for their time and efforts – your reward is bountiful!


How do I get a credit card? This question could be easily answered by any of those who attempted credit card frauds before, getting you an easy path to finding the right credit card companies for negotiation even with a bad credit – doing so via a legal way please. A prepaid credit card, merchant or store card, or a debit card may help boost your credit score in the long haul, rebuilding payment history & credit records permanently.


4. When is your last credit check?

Did you happen to miss out an important credit check? For minor mistakes at your end, you can choose to fix the bad errors easily. As for complicated errors, usually major ones posted by reputable financial institutions, not performing a credit cleanup is highly detrimental to your financial outlook. Here are some useful suggestions for you to implement quickly:

  1. Engage a credit monitoring service: If you’re too busy with work, chances of missing a payment and getting blacklisted by the creditor is high. Hire a chartered credit reporting agency to help monitor your unpaid debts.
  2. Pay to delete bad information: Another way is to use money to pay for deletion & expect to see an immediate boost in credit score.
  3. Doing a credit repair fix: Having some spare time for a credit fix, why not perform an aggressive credit repair?
  4. Pay credit repair companies for a fix: One good way is to pay for a consumer aggressive credit repair service.
  5. Liaise with a credit bureau – Experian, Equifax & TransUnion: either of the 3 reporting agencies for a free credit bureau report for free.

So, when is your final credit check? You’re to constantly monitor and update your credit score rating in a timely fashion. Do not underperform in missing out personal budgeting for monthly expenditure as it does affect your overall financial performance.


5. Get ready for an improvement in credit score?

Don’t be overly concern in signing up for a free credit score check? When the tough gets going, you’re to embrace the financial impact of being bombarded by multiple credit repair agencies. Chances are, you might hit a potential debt-fix plumber once in a while, doing a credit search until you feel comfortable with a prominent credit fixer.


Once you opt for an email subscription, probably tens of agency services, the main focus begins in receiving high-quality responses from various credit rebuilders, credit scoring companies, reporting bureaus, and many more. A proper registrar is almost an obligation for every debtor’s financial repairs.


Booster: For an immediate boost in credit score, you’ve to be patient in fixing your personal credit report, listing of negative objects, disputing for bad information deletion, and other relevant data. Reason being, the assigned officer is legally involved in both disputing the case as well as liable for any retrieval or removal of bad credit info.



6. Be the prime reason for lending you money.

Financial institutions such as banks and micro-credit firms assess you with three prominent factors:

  • Transparency in furnishing your credit info: Be clear in reviewing your current salary, contact number, residential address, and other key factors in managing probable data.
  • Local credit history data: Be concise in detailing every past borrowing record with your lender, they might catch the hint of your stable financial status.
  • Your credit referral file: Be precise in revealing your existing reference files for the lender to assess quickly, and to share with you on their credit requirements.

Whether you’ve an ex-debtor, a bankrupt holder, or legal borrower, your lender will have to access all the relevant financial data that is dire in their decision-making processes. You’ll be put in charge of finding the right reasons for lenders to choose you over others.


7. Avoid dishing out personal credit applications in 2 days.

Almost every other creditor demanded legal rights in handling one personal credit file application at a time. It’s difficult to navigate with a bad credit while leaving a negative footprint in the creditor’s radar. The internal system does detect the sense of urgency from your side hence any panic triggers might get your lenders to ‘blacklist’ you.


So, choose your creditors wisely. Assuming you’ve selected a few reputable lenders who offered a better interest rate & lenient borrowing contract, it’s time to go shopping for dishing out your loan applications (the same fashion as sending out resumes). If you’re investing in an asset, or repaying for balance transfer loan, either way don’t indulge in costly economic activities – banks are closely watching your personal expenses & looking for ways to take your credit score down.


A bank has to incur risk by lending from savers and borrowing out to you. In doing so, the local creditor is obliged to identify possible scenarios of default and doing so via bad record tracking. Never let your lender find one reason in determining your bad credit score.


8. Learn more about guaranteed credit card approvals.

How do I apply for a credit card? Some people attempted to signup for a new credit card. It’s not difficult to determine an individual’s eligibility for the available cards. You can check your eligibility score using a soft search (not having any impact on your file) or a simple credit inquiry. After all, banks too used a credit search to rationalize your odds of acceptance and matching you to the best credit cards.


Emphasis on credit score. Mishkin & Raverns [2015] collectively agreed, “Out of ten batches of consumer credit reports, only one batch used an eligibility calc & reported a savings of $4,800 in interest via a balance transfer for 35-month period at 0% interest, shifted $11,880 from up to 29.8% APR”, producing one of the best yield in personal savings. Refer below to the common topics inked to credit score:

APR rate & agreements – financial institutions drafted legal 0 apr rates to entice you in using their balance transfer programs, e.g. an individual by the name of Kelly got at bountiful windfall of Euros 4,600.00 in interest savings.

Chance of acceptance – MoneySaver, a platform whose focus was on debtor’s credit card debts & poor credit history, revealed that there is close to zero chance in attaining any balance transfer except for Halifax, demonstrating a 0.2 eligibility score or 20% chance of success.

Upon receiving a low response rate, do not be despaired in signing up for a balance transfer. Proceed on to apply for the best balance transfer scheme. Kelly succeeded in securing a 26-month 0% apr card with a credit limit of Euros 1,500.00.

Evidently, you realized that there is no such thing as a guaranteed credit card approval. It’s only by statistical evidences that lenders extend a personalized credit score service to invite you in enjoyment of their incentives. Therefore, a balance transfer is the most effective financing alternatives among other credit repair companies.


9. Timing your entry right.

According to a credit bureau report, most debtors faced judgements of up to seven years (sometimes ten years) for the listed bad information – make no mistake on the difference between a positive claim and an error. It’s better to observe the following guidelines to ensure a smooth transition in getting your credit score a boost:

  • Major credit problems such as CCJs, loan defaults, bankruptcy filings, verified listings, or identity theft frauds, do stay on your credit file for seven years or so. It’s prudent to exercise patience during the process of a credit repair – sometimes doing nothing is a strategy.
  • Listing down your bad information gives you an opportunity to learn more on your current financial mistakes. You’ve no clue before undergoing a credit review or when getting rejected by banks for a mortgage application, new auto loan, or a credit card signup.
  • Find the right credit rating agencies – many companies offer to educate & boost your credit score. However, it’s wise of you to prepare a credit score checklist and align the other side’s checklist, in search of the right credit fix match, getting higher credit score, and being financially healthy.

Once you secured the right timing, chances of bolstering financial credibility may help in getting your lenders to opt for your credit file, thereby doing inquiries to determine your credit score and finally calling you up for a bank loan. No matter the case, do ensure that not only your credit score is good, but also the listed contact information in your credit report – no one can call you if the given details in the credit report card is wrong!


Good to know tips & tricks for your credit score in 2018

Instead of digging up a long list of supporting documents, check out the following to-do guides in supplying adrenaline pills to your credit score:

  1. Don’t pay for a soft credit score check – no two lenders assess your credit file the same way, in-house scoring models differ among fund houses.
  2. Removal of tax liens – one of the most critical judgements is tax liens removal. It’s not okay to have a bunch of bad objects seating in your credit report.
  3. Temporary credit score boost – an aggressive credit repair service may relief your debt burdens, certainly not when it comes to long-term liabilities, efforts wasted.
  4. Payday loans service provider – it’s a nightmare to opt for a payday loan. The cost of borrowing is so huge that your credit score might turn negative.
  5. Credit bureau assistance – banks often liaised with either of the three credit bureaus – Experian, Equifax and TransUnion, it’s your turn to make some noise!
  6. Avoid joint ownership with bankrupts – internet has enabled your creditors to detect unwanted debt-financing applications, bankrupt credit cards, repossessed mortgage, sudden foreclosures, real estate & auto auctions etc.
  7. Remain calm in handling disputes – a leak of personal identity (also known as identity theft) is getting common nowadays. You can’t do much in covering your personal information or buying a credit report daily to check on new debt listing – seat back and wait until the storm is over.

To sum up, the aforementioned (personal) information pertaining to credit score is specially designed for you. It’s not the amount of money or connection that helps in bolstering your overall financial standing. But, it’s the direct efforts that lead you to receiving the deserved credit rating – Perseverance!


Quote of the Day: “Learn first, later remove the “L” to earn – KIG Hall [2013-2018]”


Relevant Topics

» Do’s & don’ts of credit report: List everything out at once!

» Do’s & don’ts of credit repair: Final destination for a credit fix!

» Do’s & don’ts of credit cards: Avoid credit card debts like cash advances here!

» What you need to know about credit cards: Never destroy your financial credence!

» What you need to know about credit report: Forget about shopping today!

» What you need to know about credit repair: What do you know?


This article was originally published on February 15, 2014. It has since been updated.  

Do’s & Don’ts of A Credit Score

How to keep out of financial distress? Due to financial complexity, you might have done your personal credit score wrongly – intentionally or unintentionally. It’s not exactly your fault but financial institutions like banks often faulted you as the ultimate responsibility falls into your hands. Before wreaking havoc to your creditors, observe the following five do’s and don’ts of a credit score.
How to keep out of financial distress? Due to financial complexity, you might have done your personal credit score wrongly – intentionally or unintentionally. It’s not exactly your fault but financial institutions like banks often faulted you as the ultimate responsibility falls into your hands. Before wreaking havoc to your creditors, observe the following five do’s and don’ts of a credit score.


Do’s of a credit score

Here are five dos of your credit score:

1. Keep track of payment history: As a human, you tend to err on a missed payment, over-the-limit borrowed money, bounced check payment, credit card late charge, unpaid debt, or received late notice from creditor (generally late in transition process). The mistakes made may cause a drop on your credit score from 700 to 609, 650 to 600 or under 450. Such a significant impact led to higher interest rate payable and bank’s approval rating.


Management of tracking payment history is honorable. For every missed or late payment, the bank shall include into a spreadsheet and send over to a credit reporting agency. A centralized platform keeps banks and credit bureaus aware of your financial health. Therefore, bear in mind the repayment deadlines as well as any other credit card installment plans. It’s imperative to manage financial control in recording down every single transaction – using an online application on mobile for ease of usage.
Tracker: One good way of tracking existing payment history is to induce balance-transfer scheme. A balance transfer program helps you in linking all outstanding loans, credit cards, cash advances, monthly installment plans, autos and insurance premiums altogether. It aids in tracking every single transaction in a mere 1 balance-transfer. You may apply for ongoing 0% balance-transfer or 0% APR program – just clarify on the promotional clauses.


2. Tag a friend along: Tracking for an extended period might get boring, it’s advisable to tag a friend who is doing credit score reporting as well. A friend, generally someone close to you, may offer immediate financial assistance or share tips and tricks in cleaning up bad credit – both of you must share critical information on credit fixes. Evidently, the person who is helping you in credit score calculation has to be experienced, knowledgeable, and resourceful.


Management of friendship in repairing credit history is obligatory. He/She has to be constantly updating you on personal transaction, individual spending, weekly budgeting, or additional installment plan. You’ll guide your friend in adequate financial control as well as learning the do’s and don’ts of credit score. Since there isn’t a standardized guideline in fixing your credit score, both your friend and you has to observe the financial spending budgeting in which both agreed upon.
Motivation: While it’s possible to check your credit score, having a friend or relative to tag along yields great motivation primarily because you’re not alone in searching for ideas (even if both of you are lost) and having someone to remind you on the go. The need for a friend is proven by social media experts, gaining approval from a friend on your payment history – letting others know you are reliable when “bad” things happened.



3. Pay up & show up: Instead of avoiding the payment date, outstanding bill, or bank’s lawyer letter, show up in front of creditor(s) and seek redress. It’s highly unlikely that the problem will go away on its own. Facing the reality, you’ll need to undergo a drop in credit score but the bank shall take professional credit control and assign the right mandate in resolving the dispute. Since banks needed to retrieve the “lost” debt, they’ll accommodate your personal request in loan repayment and negotiate on repairing negative credit.


Management of paying up & showing up in fixing bad debts is a skill. You’ve guts to face the truth of credit repair instead of missing the unpaid amount, getting the first step done. Next, you needed to exercise financial prudence in making the right choice of purchase (going forward). Do not engage in perilous activities like securing a housing mortgage, a new auto, a cash advance, or some unwanted criminal offense – identity theft. Fraudulent activities shall land you in jail while lawyer letter from banks attract heavy penalties and fines. Never engage in dangerous offenses at all!
Payment: As a payee, naturally due to paying existing bills and loans, you’ve to improve on spending habits as well as forming new consumption pattern. The need for personal finance gets in the way, try to feel uncomfortable at the initial phase of credit score fix. After some time, those awkward loss of credit or financial planning ideas will tend to be familiar and you might be generating passive income from certain retail investment like dividends from equities, coupons from bonds, or interests financing from fixed deposits – returns on investments.


4. Invest in a credit repair consultancy: Spending money on personal consumption does not generate a return. Instead, investing cash in a credit repair firm can do wonders, getting consultation from experts in this niche that helps to bolster financial productivity, financial planning, credit card debt consolidation, mortgage re-financing package, and other types of economical setting. These “stuff” can truly fetch higher valuations and reputation to you, in exchange for some time and money. It’s imperative to closely observe the guidelines set by the credit repair agency as the experience in fixing bad credit cannot be bought by money.


Management of credit repair investment is not simply tossing cash into the firm. An agency being employed have to possess key attributes such as prestige, debt repair portfolio, certificate of establishment, standard operating procedure, proven solution to your credit problem, and financial background in managing bad debts. These core attributes may assist in financial mobility by preparing you for potential calamity or advancing your aggressive credit repair progress swiftly – sometimes getting the “job” done within a few months or slowly rebuilding credit histories.
Invest: Since no two credit cleanup is the same, to cater to each individual’s needs, you’ve to make sure the appointed credit repair company has the ability and competency to handle your current financial affairs. When in doubt, never select an affordable credit repair agency even if the terms are fair. It’s imperative to invest in the right company and expect a return on investment, at least a temporary freeze in rate of interest being generated in your current account. Failure to negotiate a deal between a creditor and debtor revealed uselessness of an appointed firm – not being able to yield a positive return on credit score.


5. Design creative debt repayment method: One good way of fixing bad credit is to be innovative. You may find existing ideas in the market such as the debt snowball strategy – paying off small debts at the beginning phase while monitoring credit score for bigger debt repayments – useful. It’s a free method widely known to many ex-bankrupts and you too can focused on paying of smaller loans before shifting to higher installment plans. The good thing is that interest payable is being lowered, thereby gearing your salary to servicing off mortgage repayments comfortably (if smaller bills had been completed).


Management of creative debt repayments can be tough. Since the internet has been broadly available, many bankrupts started looking for riskier investments like identity theft, credit card fraud, or stealing of personal data. Do not attempt to furnish your personal credit data, individual information, credit card details, credit score, credit report, or any info. Just perform research in educating on personal financial planning while keeping an eye on your wallet – never give away personal information or divulge card details.
Emphasis: Strategies cannot be applied to everyone. You’ve to identity a comfortable way of repaying unpaid debts. At the beginning, improving credit score using a fixated financial plan is going to be tough. Gradually, learning on asset-liability management does help in repairing negative claims from creditors. Bankers do appreciate your attention toward cleaning up credit score while remaining contactable when there is any balance transfer promotion going on – bolstering debt-financing repairs in the long run.


Don’ts of a credit score

Are you struggling to get approval for a mortgage, personal loan, college debt, payday, an auto installment, or other debt-financing tool? You might have made a wrong decision in doing up your credit score! In order to identify the error made in your financial progression, it’s wise to check out the five dons of a credit score below:


1. Don’t increase spending (debt utility ratio): For those who are unaware of the credit utility ratio, or gearing ratio mentioned by financial institution such as a bank, a credit bureau, or a lender, chances of performing credit repair wrongly is higher. If you’re loading up new credit lines and spending on low-quality purchases, your personal credit score would get affected badly. Banks and credit card companies often monitored their customer’s purchases before determining the appropriate credit review to be approved.


Management of credit utility ratio is important. As mentioned in this topic, what’s a personal finance, you’ll be exposed to the proper debt utility percentage points as well as the needful financial calculations for a credit score. It’s imperative to steer out of score implosion while maintaining a healthy asset-liability ratio for a strategic portfolio mix. Yes, a certain percentage of paid debts (or credit payment history) is necessary for your creditor to judge on past borrowed money transactions.
Utilization: Nothing is more important than observing the creditor’s guidelines. Be it from the credit union, a local bank, a micro finance firm, a credit card agency, or any business offering credit service, you’ve to keep in-line with bank’s policies else risk getting a credit card rejection or disapproved bank loan – either way facing difficulty for you to re-apply for a loan application.


2. Don’t circumvent borrowing guidelines: Why does a bank blacklist a certain category of customer? If you’re a vivid borrower, long tenure in receiving borrowed cash, there is an opportunity for you to circumvent banking guidelines. It’s due to the nature of getting comfortable with the bank’s relationship manager as well as familiarizing with local lending policies – gaining favorable responses in bypassing certain legal frameworks adopted by in-house bank’s compliance team. In doing so, there is a risk of being implicated into financial & legal repercussion.


Management of trust factor in the bank is fragile. Even if you are a long-time borrower, a cash advance, a personal loan, or a new debt, do not circumvent loaning policy in any financial institution. Most banks have a centralized lending platform to track their customer’s borrowing limits and monitoring bank-to-bank (LIBOR or Fed rate) system for overnight prime rate lending adjustment – cross-integrated into consumer banking platforms. You’ll have no chance of “gaming the system” when it comes to lending money from investors.
Intermediary: As a financial intermediary, banks pooled funds across a broad spectrum of fund houses; individuals, corporate lenders, fund managers, and other asset-related loans. The bank has to observe strict financial regulations, hence requiring to closely observe your personal application for a credit score approval or increase in a scoring model.


3. Never sell your credit score info: What happens if you leave your gate unattended? It is the same analogy behind revealing your credit score, divulging personal information, selling your credit report to others, involving third-party merchant to analyze your fico card, or even asking generic questions online. These financial problems do lead to one of the biggest fraud in the United States and United Kingdom – identity theft. No amount of credit guard protection or credit scoring platform can ensure your personal and financial safety.


Management of sale of credit score is strictly prohibited. Assuming your individual identity has been leaked out to the worldwide web, intentionally or unintentionally, you’ll faced legal implications, subjected to heavy fines or serving a jail term of not more than ‘X’ years (leniency depending on the local jurisdiction). Never attempt to sell your personal identities out to the public. Sale of credit report is against reporting agencies’ policies and it will do you no good benefit in the first place!
Fraud: One good practice to adopt is to purchase a credit report using your name. You are entitled up to 3 credit reports, separately from three credit bureaus – each providing you an annual credit report for you to check credit score. Therefore, you’ve to be confident in reading the report card while learning the tips & tricks of fixing your credit score the right way and not involving illegal score boosts.


4. Never assume calculating your credit scores: There are many different ways in calculating especially using an online credit score calculator. Many consumers fell into this pitfall of using online scoring models, developed by corporate-hungry developers who wanted a slice of profit, and got into financial distress after learning that they’ve overleveraged on the necessary credit utility ratio – rationing of borrowed cash has to be involved & trimming down on unpaid debts became a chore.


Management of credit score calculation is a mystery. Since there’s no actual formula that has been approved by credit bureau, calculating your credit score card becomes a wonder. If you’re ensnared into using an online credit score calculator, been over-utilizing your personal credit ratio, do implement proper financial control to mitigate potential cashflow damages, thereby lowering your report card once there is a credit score review going on.
Operation: You’ll observe a strict debt repayment procedure, increasing monthly repayment in servicing mortgage debt, reducing credit card consumption, planning for personal budgeting, fixing your credit management tightly, and paying off the difference between current used credit ratio and Experian’s scoring model.


5. Never hire a lawyer to combat claims: Why are your creditors claiming rightful ownership to your personal assets? There is a valid reason for a claimant to submit lawful claims in seizure of individual properties. Instead of combating credit disputes, sending lawyer letters to one another, why not figure out the right way to manage dispute resolution? Seat down with your creditor(s). Question on the lending policy and initiate a response toward positive (verified) claims.

Management of law firm involvement is not advisable. While you can dish out legal suits to your creditors, your banks, your relationship managers, your credit unions, your savings & loans associations, or your financial lenders, do have a sophisticated legal debt framework done by external auditors and lawyers – going head-on with them is merely testing of patience and luck. You’ve to be assertive in disputing expired claims on assets as well as serving a proactive attitude in repaying the loans on time.
Lawyer: No one wants to involve an ombudsman or legal agency. Both the creditor and debtor knew the incurred costs, at times not worth the penny. Although you’re aware of some ex bankrupts not paying small sums of money, they had been blacklisted by many credit scoring agencies and lending corporations. Do not be like them! You do require a certain amount of borrowed money (for leverage) in order to rebuild your credit history or even to grow a portfolio of asset classes (spring-boarding your retirement planning process).


Good to know about credit score

Unless you’ve been leaving under the rock, you surely notice that credit reporting agencies do observe a scoring model or outsourced to external vendors in managing their score calculations. To err on the safe side, do continue your venture in learning the best practices of credit score concepts.


Here are some of the industry good practices for your credit score:
• Learn more about scoring models such as FICO Score & VantageScore 3.0
• Communicate with 3 credit bureaus: Experian, Equifax & TransUnion
• Guard against identity theft frauds
• Invest in a credit insurance protection scheme
• Seek redress from local credit union if need be
• Don’t help a friend to apply for personal loans
• Try to manage individual consumption
• Invest in a diversified portfolio: Mutual funds, equities & bonds
• Never attempt to cheat on your credit score
Knowing the do’s & don’ts of your credit score does help in improving the chances of your credibility. It’s wise to engage a credit repair company if you’re unsure of any negative object listing or trying to uproot a failed cleanup credit service. A single attempt of criminal breach of trust, like that of an identity theft or a fraud in credit card, will permanently detriment your credit score (for life). Proceed to fix your individual credit score today!


Quote of the Day: “Get uncomfortable with spending habits – KIG Hall [2013-2018]”

Relevant Topics

» Do’s & don’ts of a credit report: Use a credit report card wisely!
» Do’s & don’ts of credit repair: Manage your personal cleanup program here!
» Do’s & don’ts of a credit card: Lower your risk & boost your reputation!
» What is a credit score: Re-learn your personal scoring factors now!
» Do’s & don’ts of personal finance: Manage your financial plan here!


This article was originally published on February 09, 2014. It has since been updated.

Dos & Dons of a Credit Report

Having a credit report is almost a double-edged sword. Some people prefer not to obtain a credit report from local governments, mainly due to phobia. Finding the need for performing credit repair is obligatory. Your personalized report shall be the root of determining a credit score as well as financially helping you in securing a mortgage, loan, auto, or an interview.


Here is a comprehensive suite of do’s and don’ts of a credit report:


Do’s of a credit report

You’ve to be clear on the reasons behind fixing your credit report. A condition that needs a check on credit is, but not limited to, obtain a mortgage, apply for a new credit card, avoid a bankruptcy charge, dispute on an item, predict your credit score, or locate an unwanted object – improve individual credit rating. Here are five dos of a credit report to do:


1. Unlimited revision: How to check a credit report? Firstly, you’ve to familiarize with the flow of monitoring a report card. Do not rush to file multiple disputes but penned down discrepancy(ies) that needed immediate attention. One revision is clearly insufficient to pass a credit review. It’s advisable by Credit Union (2015) to perform a detailed check in a credit report card at least twice, best practice is thrice monthly or more.


Management of unlimited revision will consume much time & effort. If you’re working till late evening to improve job employability, an alternative is to seek financial assistance from either a relative, friend, or a credit repair consultant. The individual will help to check through listed object(s) for a credit dispute. He/She too may identify potential discrepancy. missed payment, or alert you on identity theft fraud.

Editor: As an editor in reviewing your personal credit report, to the best ability, you’ve to include: credit score check · clean-up unpaid debt · identify error · credit bureau mistake & many more. Do implement a fixated frame work for others (family member, friend, or agency) to observe when you request a credit report check from them.


2. Resolve dispute internally: A credit report dispute is recommended. In a research study by Experian [2009] credit bureau, the agency found that approximately 85% credit reports being filed, had errors & mistakes in one way or another – error not a threat but unattended mistakes impacted personal credit score. Creditors often filed claims in bulk and might missed timely updates. Do search for common credit error, discrepancy or mistake on your own – calling up a local credit repair business specialist for inquiries.


Management of dispute resolution internally is difficult under certain circumstances. At times, a claimant might not be responsive or willing to address your query. In this case, you’ve the rights to pursue a charge back by hiring a credit bureau; Experian, Transunion, or Equifax in handling your dispute case. The appointed agent shall investigate by examining your credit bureau report before acting as an ombudsman to the respective creditor.

Intermediary: Conflict resolution is a skill that not many people have. You’ve to invest resources in managing dispute filing while maintaining a stand in positive disputes. It’s imperative to be honest when a claim is valid but do not deliberately reveal as efforts might be wasted on other intertwined credit disputes.


3. Fix one error or discrepancy: In a credit fix case study conducted by Experian [2010], KIG Hall [2013] ran an analytical model and revealed a revelation: every debtor in the U.S., U.K. and Canada purchase a credit report and start fixing any issue being addressed. It’s perilous to gather errors in its entirety and blow-up simple problems. In doing so, you might receive a backlash or a myriad of creditors issuing lawyer letters directly.


Management of credit repair needs patience. Getting impatient and driving up boatloads of errors is not going to resolve disputes under 24 hours. The worst part is unintentionally stepping into domestic bureau’s radar for a complete credit review. Exercise financial prudence in maintaining composure, applying for legit dispute for creditor’s perusal and receiving timely response – one issue at a time.

Plumber: If there is an urgent need to solve a debt payment issue, it’s advisable to contact a credit repair company for legal remedy instead of sending legal letters to creditor. The agent can mitigate response time by utilizing layers of connection to temporarily relief credit needs while managing inquiries from both parties – a win-in orientation for you and counterparty.


4. Review & monitor your credit report: The public has shown incompetency in credit report monitoring. Do observe your credit history in full, any missed payment, borrowing record, dispute filing, identity theft, credit card fraud, or nitty-gritty personal information – never exposed irrelevant details to your enquirer. It’s necessary to contact any of the 3 credit bureau and get a credit report up to three times annually per agency.


Management of credit report scorecard requires a great deal of time. If you invest time in repairing bad objects, factors affecting your fico score, you’ll learn the art of challenging logical assumption when certain dispute arise between debtor and creditor. This is a peculiar skill in removal of tax lien especially. Such complexity needed debtor’s intervention in understanding the direction of investment of asset mix while finding remedies in lowering income tax bracket.

Reviewer: Anyone can be a reviewer of your credit report. When you or another party decided to implement a change in your report card, notably at your end, it’s obligatory to receive complete information on the change made as adopting good practices may improve your credit score – not guaranteed by anyone, however.


5. Improve your credit file: A common cause of getting rejected by financial institution is incorrect personal information, lack of payment history, not paying bill on time, or insufficient evidence on last drawn salary. The problem can be avoided unless it’s a critical one such as being unemployed for many years, undischarged bankrupt, or bad borrowing records. Why not fix your credit report in an amicable manner?


Management of credit file improvement is challenging. If you’re employing a highly effective credit repair restoration clean-up, chances of facing the above problems tend to surface. In order to improve your credit file, the right way of course, financial planning in; removing bad object, seeking creditor’s claim to be deleted, recalling of unpaid dispute, or assuming financial assistance from credit union, is needed.

File: An individual credit file is personal. All information remains confidential and you’re responsible for any mishap. Do the needful, appointing of credit repair agent, calling credit bureau for assistance, locating a nearby physical business, negotiating for positive credit dispute to be removed, or any other detrimental subject, would be highly appreciated.


Good to know the dos of a credit report

Analysis of the do’s of a credit report is necessary. It helps to remove any complication that serves during the period of a credit repair plan. Some of the common to-know items are:

  • Fixing of credit report does not guarantee increase in credit score albeit being of similar relevance
  • No one can promise your success in recovering your personal credit report; tax lien removal, bad object removal, dispute resolution, or any item in the system
  • Without proper communication channel, black & white agreement, nothing is fixed and subjected to change anytime
  • Payment of credit fix must be done after fulfillment of contractual agreement, not the other way around – cash advance payment might be possible (in percentage)
  • When engaging an agent or relative for credit review, remember to go-through together with them – deterrence of identity theft & learn together
  • Always file a backup copy just in case of sudden loss of personal information


Don’ts of a credit report

A credit report is arguably the most important aspect in the credit repair spectrum. If you do not possess an “attractive” report card, chance of being rejected, shunned, or even blacklisted by a credit card company or financial institution is possible. Here are five dons of a credit report for you to follow through:


1. Engage fraudulent claims on credit report: Before committing a criminal offense, you’ve to consider an irreversible consequence, warning letter from financial institution especially a local bank, blacklist by a credit card company, loss of reputational asset [Longvine et al., 2002], issuance of lawyer letter to you, freeze in credit report score, jail for identity theft fraud, or all the above. The harsh penalties above should be of great concern, hence do not engage in fraudulent claim at any point of time.


Management of temptation in committing credit report fraud is high. When your unpaid debts such as housing mortgage, auto loan, credit card debt, utility & gas bill, insurance premium or outstanding personal loan, are growing at an alarming rate, accompanied by growth in federal’s prime lending rate (interest rate observance), you’ll be tempted to commit fraudulent activities like credit card fraud or identity theft – doable at an initial small sum.

Fraudster: Avoid committing fraudulent attempts on your credit report. An identity theft fraud case will land you behind bars. There is no benefit in fixing bad credit the wrong way, not to mention implied negative stains on your credit report. Instead, adhere to the aforementioned five do’s of a credit report – repairing your report card in a legitimate manner.


2. Sending letter of dispute to a law firm: What is the legal repercussion of a credit dispute? If you’re unsure on how to answer the question, avoid sending multiple letters of dispute to your claimant’s mailbox. A lawyer letter, drafted by accredited law company, is an official statement which “forced” the correspondent to revert, in a not-so-good manner of course. The other party might initial a tripartite setting and perform rebuttals on certain positive credit information – backfiring your legal claim on personal asset protection.


Management of dispute letters to a creditor is not feasible. If you’ve a long-term lending history in a bank, credit card corporation, credit union, or savings & loans association, issuing of a credit dispute is recommended but not a drafted lawyer letter of dispute for credit protection. The corresponding bank, working with in-house credit report compliance and legal department, shall take preventive measures in deterring loss of reputational assets – dishing out equally provocative bank’s agreements to your mailbox, win-lose orientation.

Judge: Never attempt to oust an organization without considering legal repercussions. The counterparty has issued corporate rights to claim on your personal assets (with proper evidence documenting missed payment or bankruptcy filing charge). A good way to resolve conflict is to hire a good credit repair company, in prestige and in professionalism.


3. Entrust 100% of faith into hands of credit repair agency: If you’ve decided to engage a good credit repair company in managing credit disputes, addressing the second topic above, don’t commit 100% of your credit report into the hands of appointed agency. The rationale behind finding an external source is to financially help in identifying the reporting discrepancies, but you’re ultimately responsible on your creditor’s claims (not the credit repair agencies or government bureaus).


Management of credit repair company’s trust is based on qualitative factors. Firstly, the chosen (best) credit repair agency needs to prove on its claims, past successful credit fixes, region-wide credit clean-up campaigns, liaising with multiple vendors, proving broad spectrum of connections, strong communication skills, or other convincing factors. Failure to prove a salt’s worth may result to (even more) legal repercussions or implications near future.

Faith: A goodwill on credit repair company’s side to check with the credit bureaus for your existing profile is an example of professionalism. You’ve to adopt a proactive stance in seeking the agency’s portfolio or furnishing the right credit information for a dispute – let the agent do the legwork while you monitor the entire process of item(s) removal.


4. Sell personal information on credit report: What happens if you sell your individual credit information out? The “black” market has established connections in retrieving your credit report, credit score, credit card details, or other relevant information – beginning growth phase of potential fraudulent schemes such as identity theft or unauthorized access of credit cards. A quick buck might land you into legal implications or locked into jail. In any financial institution’s compliance document, you’ll see a disclaimer that the principle agent is not responsible for financial hiccups, loss of data, privacy breaches or target of reparations.


Management of personal information sale is strictly prohibited. If you’re undertaking such a risk, sale of individual information, sale of other’s information, identity theft fraud, or any restricted content, chances of not being able to recover credibility in the eyes of creditor(s) are of permanence. There is no way in resuming intra-day debt-financing activities across domestic financial agents. Steer clear of mismanaging personal information; 1. Banks are not liable & you’ve signed an indemnify agreement and 2. Sale of personal information is not allowed.

Reseller: When you perform sale of an identity, revealing of personal rights, a fraudulent identity theft company shall set up a new credit file (that of yours) and initiate unauthorized borrowings (usually from a small undetected amount to vastly large sums). By the time of acknowledgement, your entire credit history collapsed, and rebuilding of new profile requires a great deal of effort.


5. Never give away your credit report: Many consumer debt reports are available online for sale. Such distribution of content greatly increases opportunities of theft to your personal identity. Do not issue out your report card to anyone, a credit repair company, a creditor, a credit bureau, or a relative. In case of requiring financial assistance, you’ve to seat down with the individual and review your credit report together, settling on the spot or pending outstanding issue for future discussion.


Management of distribution of local credit report is prohibited. If you risk the report card to be given to a thief, there is no legal responsibility on the side of financial institution or 609 credit repair company. Once personal information is available, either on the Internet for everyone to view globally, or simply to the dark web for sale at high price, chances of retrieval is slim & necessary lawyer charges shall be pressed against you – dashing any hope in cleaning up your credit history.

Distribution: Content reviewing is different from content revealing. Do not share any individual information, personal identity, credit card details, or exchange of identities, to anyone. The reseller will have an opportunity to capitalize on identity theft and exercise fraudulent activities upon goodwill.


Good to know in fixing a credit report

Before concluding on the do’s & don’ts of a credit report, you’ve to pay close attention to ancillary evidences as well as supporting factors – maximizing your chance(s) of improving your credit score. A report card has to be digested before diving into legal disputes.


Observe the ancillary variables below to further improve your personal fico scorecard:

  • Always purchase a credit bureau report when in doubt
  • Regularly monitor daily activity & personal expense
  • Check your credit score on the go
  • Find ways to improve credit rating among agencies
  • Make full use of an annual credit report
  • Call 3 credit bureaus: Experian, Equifax & Transunion
  • Book an appointment to check credit score
  • Learn how credit check companies operate
  • Use a credit score calculator
  • Invest time & effort in credit protection
  • Timely reminder on observing recurring payment
  • Resolve credit dispute in an amicable way
  • Detect your problems early via consumer credit report
  • Never divulge personal information to kin


The above mentioned ancillary support shall enhance your overall credit report, scoring model or general overview. It’s imperative to attempt all the do’s and don’ts of a credit report but not advisable to include online score calculations or researched content – most had been reused till abuse. For those who wanted to learn on various strategies in combating poverty, learn: how to check your credit score.


Quote of the Day: “Never reveal the truth to everyone – KIG Hall [2013-2018]”


Relevant Topics

» What is a credit report: Learn more about using a report card to your advantage!

» Do’s & don’ts of credit repair: Find out various means to fix current sorrows!

» Do’s & don’ts of a credit card: Accumulate latest incentives and interest rates here!

» What is a credit score: Boost your current credit scores!

» What is personal finance: Receive high-quality education to financial prosperity today!


This article was originally published on February 07, 2014. It has since been updated.  

What is a credit score?

Considering the fact behind approval rates, typically falling between the range of 300-860 points, a credit score of 600 or above received favorable responses. Any fico score surpassing 800 on the same band is deemed to be excellent. If not, most consumers credit scores fall between 600 and 750 [Study Lab, 2017]. Creditors tend to exercise leniency for high scorers while imposing stricter controls to that of lower scores (in the range of 300-550) – statistics proven that better scores tend to yield lesser defaults on borrowing.


Generally, credit scores are assessed by prime lenders; credit card companies, car dealers offering in-house loan rates, bank mortgage departments – making crucial decisions in fetching debt valuations (issuance of a bank loan or new credit card) and tiered interest structures (like ongoing interest rate or initial cash payment). Experian [2015] mentioned on some common types of credit scores; FICO® Scores and scores by VantageScore, hinting other yet relevant industry-specific scores in the keep.


Source: Blogosphere of Equifax, Experian and Transunion [2009]



What is a good FICO score?

Invented by Fair Issac Corporation, renowned industry standard practices in today’s world, one of the highly rated types of credit score is FICO Scores. Bulge bracket lenders such as financial institutions often used FICO Scores while Mester [2013] depicting a broad range from 300 to 860. According to Experian [2009], in the eyes of such models, any FICO Score above 670 is deemed to be a good credit score and a score above 800 is perceived to be of high quality, if not exceptional.


Source: Experian on FICO Score Ranges [2009]

Credit Score


% of People


300 – 579

Very Poor


Applicants may need to pledge a collateral or deposit. Those who defaulted in the past may not be approved for credit.

580 – 669



Applicants are deemed as subprime borrowers in this range.

670 – 739



Experian’s study concluded only 8% of applicants within this score range may default in future – delinquent status.

740 – 799

Very Good


Lenders offered better rates for applicants in this score range but subjected to past payment histories.

800 – 860



Applicants having such scores seem attractive to lenders and obtaining the best rates from most lenders.



Source: Blogosphere of Equifax, Experian and Transunion [2009]



What a good VantageScore looks like?

As aforementioned above, Scores by VantageScore are common kinds of credit scores utilized by lenders. Three major credit bureaus, collectively known as Experian, Equifax and TransUnion, developed VantageScore for consumers to perform research on a centralized platform. For the latest development of VantageScore 4.0 (beta mode), the model is based on 300 to 860 range. For borrowers having above 750 score is deemed to be exceptional, anything above 700 can be of similar ratings [Total Credit Check, 2011].


Source: VantageScore by 3 Major Credit Bureaus [2015]

Credit Score


% of People


300 – 550

Very Poor


Applicants may need to pledge a collateral or deposit. Those who defaulted in the past may not be approved for credit.

551 – 650



Applicants are deemed as subprime borrowers in this range.

651 – 699



Experian’s study concluded only 8% of applicants within this score range may default in future – delinquent status.

700 – 750

Very Good


Lenders offered better rates for applicants in this score range but subjected to past payment histories.

751 – 859



Applicants having such scores seem attractive to lenders and obtaining the best rates from most lenders.



How important is a credit score check?

What are the indicators financial companies used? Most lenders observed credit scores in anticipating your financial status, and the ability to repay in a timely fashion. Also known as risk scores, lenders may take the opportunity to calculate potential “risks” associated to your credit accounts – in exchange for a peace of mind.


The quality (or outcome) of a loan highly depends on good credit score, best if it is excellent in the eyes of debt financiers. Indeed, the difference in mere few basis points may do injustice in getting a lower-than-average interest financing, ended up paying for more than thousands of dollars out-of-pocket fees. Mishkins [2013] argued that such cost of savings is not friendly enough to qualify for home rentals or even financing a home.


One has to rationalize the concept of building a legacy. A few poorly controlled financial habits can wipe out a lifetime of reputational assets. Levine et al. [2015] revealed a statistical report of more than 30% of Americans not having a single dime in savings – debt-ridden till deathbed. This study further emphasizes the need of prudent savings plan and not seeking endless financial help from local government bodies.


An alternative is to start with a financial objective, simply like saving up for a new auto or renting a new apartment, your credit is the first to come to mind. There is no secret formula for creditors to determine your financing ratio, bearing in mind that 609 credit scores or above is the minimum standard fixated by legal lenders. Raken & Lim [2003] encouraged participants to adopt a SMART goal-setting method, thereby lowering risk of getting into economic turbulence.


Inversely, credit scores are not ‘everything’ that lenders demanded from borrowers. Your individual credit report plays a significant role in namely; how much debt you have, claims listed by creditors, tenure of past borrowing histories, and other negligence derogatory marks being slammed. In fact, apart from your credit report and credit scores [Money Matters, 2010], licensed lenders too assessed your monthly spending against overall earned incomes, well beyond the means of scoring system.


Fact: One common misconception is that ‘Someone’ is 90% 100% accountable for your entire liabilities. Wrong – take part in Credit Score Simulation today!


What factors affect personal credit score?

There are many scoring models being used among asset-liability management firms. Since there is no one-size-fits-all, information impacting a credit score is highly variable though not close to complete randomness [Sincere, 2014]. A few key elements affecting your credit scores could be identified within your personal credit report (as seen below):

  • Historical payment gateway – one of the fastest ways to seek clarity, weeding out delinquent holders while minimizing potential false positive hits, either missed payments or frequent negotiations for waivers for credit cards
  • Credit utilization rate – another common method to fish out overleveraged borrowers, thereby lowering risks of loan defaults, generally kept under 30% of total borrowed sum [KIG Hall, 2018]
  • Personal information context – number of outstanding liabilities, rate of finishing up debt payments and aged credit accounts
  • Debt-to-Income ratio – an alternative to determine interest-financing rates, based on big but raw data
  • Dishonored requests – tax liens on credit report, civil judgments from Courts, bankruptcy charges or other minor claims
  • Credit repair paid efforts – ongoing negotiations in an attempt to remove hard enquiries from credit report


Discover FICO score elements

  • Exceptionally impactful: Amount & Date of payment on credit cards and loans
  • Highly impactful: Sum of total outstanding balances owed
  • Moderately impactful: Tenure of credit history
  • Less impactful: Portfolio of debt mix (number of credit accounts set-up)


Uncover VantageScore 3.0 models

  • Exceptionally impactful: Payment history
  • Highly impactful: Percentage of credit limit indulged, and aged of account
  • Moderately impactful: Number of debts combined
  • Less impactful: Number of inquiries for your credit report


Negative consideration on credit score include:

  • Personal identifiers: Your marital status, nationality, country residence, color, race, language or ethnic – under strict regulations by Consumer Credit Protection Act [AAA-Credit Guide, 2001]
  • Individual Age
  • Type of Employment: Nature of industry, specifics of workplace or any contractual agreements within the Individual Employment Act – notwithstanding external factors in justifying for ultimate decision making process.
  • Location: Where you are currently residing – but subjected to local jurisdictions outside of United States (or certain laws like Dodd Frank, 2013)


How to boost your credit score fast?

If you’re frustrated at your current invalidated information, discovering lack of proper attention after reviewing your credit information, chances are there might be more surprises in the bag. Different reporting agencies honored stipulated timings in updating your credit report to the latest version hence reflecting the nominal value of your credit score.


At KIG Hall’s score simulator, you can make important self-discoveries on those companies failing to accurately detect the best credit scores for you (filing legal disputes had always been your responsibility, no?) – Find out the realest method to resolve bad credit karma:

  1. Life-changing decisions on credit score after Chapter 7 or Chapter 13 bankruptcy discharge
  2. Rebuilding credit score history using secured charge cards
  3. Dos & Dons of credit repair service providers [KIG Hall, 2018]
  4. Undergo credit restoration or enhancement initiatives [Credit-Repair Ex, 2013]
  5. Learning how to read a fico scorecard and meaning of assigned figures
  6. Proactive attitude in removing tax liens in your credit report and understanding the magnitude of not repaying debts within the bounded agreements


Negative impact on credit score include:

If you’re to invite lenders to review your credit score between the range of 300-600, far cry from the much-welcomed 700 points figure, chances of obtaining an approval on credit cards or loans application are going to be slim [How to Fix You, 1999]. Even if an association practices leniency, the rate of interests is going to be highly unfavorable, not to mention requesting upfront security deposit. The only thing you could do is to be prudent in current consumption spending as well as waiting for the natural credit recovery to occur.


A handful of mortgage servicers rendered consumer support to lower end credit scorers:

  • FHA mortgage packages come with a 3.5% down payment and a minimum of 575 or above – borrowers yielding 580 onward stands higher chance of success
  • Applicants under 580 score may need to fork out larger down payment of 10%, but in line with other expectations


What to do when I don’t have a credit score or 0 score?

Under normal circumstances, such as being a student or freshly out of college, having no score available is almost fine. Conversely, ex-bankrupts trying to rebuild credit portfolio mix also possess insufficient history. Please do not get confused on the slow updates on credit karma platform, though. Re-define your methods in establishing credit as per below:

  • Under age 21: Seek a co-signer first or demonstrate the ability to repay via source(s) of earned income from employment
  • Guarantor: a guardian or parent may authorize you to hold a credit card (or multiple cards)
  • Others: ranging from bankrupts to discharge bankruptcies, one good idea is to consult the nearest credit union for financial assistance in rebuilding your borrowing histories – best if a secured or charge card is being applied and used over a period of 12 months


Hard Truths behind individual credit score

Differentiating your credit scores from 3 annual credit reports is important. Mishkin & Lawyer [2011] rebutted on the need to know that your personal credit score is calculated upon request, and not the other way round. It is being updated over time – once fresh entries had been received from creditors; missed payments, increasing lines of credit and total outstanding debts.


How does marriage affects credit score?

Short answer is no. In an event of being engaged, there will not be a merger & acquisition on any of your credit scores or reports [Credit Karma Experian, 2012]. Instead, a joint account titled may be display on both credit reports, but the type of lending history still remains unchanged – preventing an unfortunate incident known as identity theft.


What is Experian’s credit score check?

Lastly, some people misperceived that calculating your own credit report or score can raise red flags on the radar. Immediately dispel such malicious thoughts as self-inflicting damages can be contagious too. Please be informed that checking your own credit scores is classified as soft inquiry – a unique concept of calculations without impacting existing ratings. Raven [2003] encouraged individuals to take a bold step forward in recognizing the need for calculations, sometimes seeing as a fun activity to manage personal finance well!


Quote of the Day: “Patience is Attractive – LIG Corp [2018]”


Relevant Topics

» What is a Credit Report: Learn more about using a report card to your advantage!

» What is Credit Repair: Find out various means to fix current sorrows!


This article was originally published on January 15, 2014. It has since been updated.  


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