Why Debt Consolidation Is A Good Idea For You?

For everybody, debt consolidation is not always an ideal solution to get rid of debts. However, it offers you some kind of relief from your debts carrying high interest rates. You must seek expert advices from debt consolidation professionals and choose debt consolidation programs watchfully. ‘How do I consolidate my debts’ is a common question arising in the minds of millions of debt-ridden individuals. If you are sincerely looking for ways to clear up your debts, you have to know the basics of debt consolidation. The following details would help you get an overview of the debt consolidation procedure.

Debt consolidation is the method of combining all your debts into a single monthly payment and paying them off. For many individuals, it is a useful idea. However, the success of debt consolidation is dependent on your debt and income level. Most of the time, you can get low and manageable monthly payments. All your smaller loans are consolidated into a bigger loan and you take out a new loan equal to that amount. In this way, you can pay off your debts sooner since you don’t have to pay your multiple creditors separately and just have to make a single payment to the consolidation company. The consolidation company would pay your creditors on your behalf. It is a real timesaver. Instead of sending out 10 checks per month, you just mail one payment which is really convenient. Debt consolidation can also save you from embarrassing creditor calls and is a useful alternative to options like debt settlement and bankruptcy.

Consolidation of your debts gives you the chance to come out of the vicious debt cycle and get your financial life back on track. A lot of people become overwhelmed by debt problems and frequently get confused to determine ways to eliminate their debts. Debt consolidation often works as a handy tool for them. It does not hurt your credit report so much. The consolidation professionals negotiate with your creditors to lower the interest rates and monthly payments in order to help you arrive at a position that is suitable for you. There are both for profit and nonprofit debt consolidation agencies to help you out. People with inadequate credit scores can also benefit from their services

Common Misconceptions About A Credit Score

An individual can find lot of recommendations on how to increase and look after a credit rating. Some of it is beneficial and some won’t be. The cause for much of recommendations not being beneficial is because of the common fallacies about a credit rating.

A fallacy is an individual ought to close problematic accounts to get a better credit rating. This fallacy is based with the thought if the account is closed it won’t be included in the formula. The truth is the account is closed but your payments to that account will be on your credit report. With this account closed your debt to credit ratio will go up. This is the second biggest component the credit rating formula, 30. Not closing this line of credit is better.

Another fallacy that you might hear is looking for credit hurts a credit rating. This fallacy actually can be right and wrond and it depends on what kind of loan are you looking for. an individual ins’t permitted to look when it comes to a credit card. A person is permitted to look for mortgages and auto loans.

A third common fallacy is that an individual should request to lower available credit on the lines of credit to improve FICO rating. This ought to be steered clear of. As mentioned before your debt to credit ratio stands around a third of your rating and lower the limit will produce a picture of having debt. This won’t have the result of improvement and could lower it.

Here was just a few methods and there are several others.

Why a Consumer May Want to Correct Credit Report Mistakes

Most individuals are fimiliar that getting back on the right path with credit can be a entensive process and instantaneous results might help keep your motivation up and ensure a person doesn’t fall off the wagon.

Initially, a consumer will have to check every credit reports for errors to dispute any found. Some websites report that a majority of consumer credit reports contain mistakes. Furthermore let us say that these are not in the favor of the person. The usual mistakes could hold back a score are delinquent payments over more than 7 years old, credit inquiries more than two years or longer, and any possible double collections. Once you have identified likely errors an individual may use the credit bureaus online dispute forms and by law once a dispute has been submitted, the bureau have to explore the dispute in 30 days. If any mistakes are taken off it will be completed in the 60 to 90 day period providing you quick increase with little sweat.

Also, you should do anything to pay down debt. A debt to credit ratio is the second major piece of a FICO score and the less the quantity of debt the healthier for your score. Now, paying off a lot of debt may appear to be difficult, many people have instituted some original ways to accomplish it. One of the most widespread ways is to sell anything not needed.

You should make sure all the accounts that have been paid religiously on the dot are told to the consumer report agencies. This is not difficult to know with a quick glance of a credit report. If they are not reporting, you could call your lenders and plead with them to report. These positive accounts will help your score.

It is difficult to know what increase a person will obtain and it really depends on your history, but these might be the ideas to get you ready for success.

What to Know Regarding the FICO Formula

Getting a good FICO rating an individual needs to have control. Also, people need to be acquainted with what comprises a FICO rating. Knowing the FICO rating formula will allow you to make day to day decisions to get better and maintain a rating.

The first section of the rating is the individual’s payment history to their accounts. It has the largest effect since people who are delinquent have an increased likelyhood of default. Negative items against the rating are commonly 30 day delinquent payments.

The next section of the FICO rating is the debt to credit ratio and it looks at how much a person is in debt . The more a person is in debt the greater risk they represent to their accounts and the lower the possible rating.

The third section of your FICO rating is your credit history and takes into consideration the age of the accounts. Lenders prefer to have a decent credit history and will also aid a person’s FICO rating.

The fourth section is your applications for credit. An application is considered when an individual applies for new credit.

The fifth section is credit mix. This examines of the types of credit an individual uses.

The Effect of Debt Consolidation On A FICO Score

A customary manner for individuals to make an effort to emerge from debt is to use credit card debt consolidation. The back story usually includes an individual who has many credit cards, each one having a different balance. Also, every one of these cards holds a distinct interest rate plus sometimes the rates are high. Furthermore, every account boasts a different minimum payment and due at several days throughout the monthly cycle. This creates a complicated circumstance to handle.

To fight this circumstance starting methods people turn to is credit card debt consolidation. This procedure comprises finding an account that will give a low APR on balance transfers. Then, move the money to this line of credit. Now, they have a single payment with a much lesser interest rate.

First, if considering your credit score, credit card debt consolidation could lower your score because of your debt to credit ratio. Consolidation would create an increase in a specific account’s debt to credit ratio.

The most common pitfall is to belive there has been progress. The truth is a consumer is still in the same amount of debt. They needs use the benefit of the reduction and apply it to the balance.

who has 850 credit score

Credit scores, on the scale assigned by FICO, range from 300 to 850. Who has an 850 credit score and what canyou do to get one? Less than 1 percent of the .

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Highest Credit Score Possible: What Is The Best Credit Score?

Today I want to share with you important information about credit scores. More importantly, I want to tell you what is the highest credit score possible.

The first thing you need to know is that your credit score is actually a score that gets reported to many different places. The main credit score place/company is FICO. FICO is the main credit score companies and financial institutions use to determine how much money to lend you, how much interest rate to charge you, and if you will get a loan at all. Your FICO score will factor in heavily into their decisions, so it’s obviously important to have as high a FICO score as possible.

Another important thing about FICO scores is that you don’t have just ONE FICO score. There are 3 main credit reporting bureaus/agencies, and you’ve probably heard of them too. They are Experian, TransUnion, and Equifax. Each company will report your FICO score. So you’re probably wondering then which FICO score is the one a lender gets?

Well, FICO will report your credit score to companies and institutions that lend money based on the average of the 3 main credit reporting companies. Your credit score is a “live” entity, meaning it is something that changes constantly – depending on a number of factors. They can definitely all improve at a gradual rate as you become more and more responsible with debt, and therefore increase your trustworthiness with lenders and financial institutions.

So What Is The Highest Credit Score Possible?

The absolute HIGHEST credit score you can achieve is 850. FICO has a range of 350 (lowest score possible) to 850 (best credit score possible). Very few people have a credit score of 850. You will need to be very responsible with credit for a fairly long time in order to get and maintain that type of score.

However, the nice thing about credit scores is that you don’t need an amazing score to get low interest rates and big loans. If you are in the 751 – 850 range, you are in the “great-excellent” credit score range, and this is a great place to be. You will be favoured with the lowest interest rates and biggest loans possible – typically. Like this guy here, who has a credit score of 848. He is in the 1% of Americans with a score like this.

Getting a high credit score isn’t the most difficult thing to do. It just takes time and responsibility. You can start with a simple credit card or small revolving loan (like a line of credit). Use it every month, even if its for $50, and pay it off every month. The act of doing this CONSISTENTLY will help improve your score. Whether you have bad credit right now or you are just starting out building credit, or if you have great credit, you need to do these types of things to raise your score or to continue to maintain a great credit score.

Who has 850 credit score

If You Have A Low or Medium Credit Score, It Doesn’t Mean You’re A Bad Credit Risk Necessarily

If you have a bad credit score, it doesn’t automatically mean you will default on a loan. Credit scores are all about RISK. The lower your credit score, the higher the chances you will default on a loan, but this is based solely on statistics that FICO has gathered. It doesn’t mean YOU yourself will necessarily default. So it’s really important to get that high credit score to avoid being grouped in with the other people who are more statistically likely to not pay back a loan.

Getting The Highest Credit Score Possible Doesn’t Really Matter

At the end of the day, having a score of 850 feels pretty damn good and it’s something I guess you can brag to your friends and family about. I think I would if I had an amazing score like that too. But it’s kind of a weird goal to try and achieve in my opinion. Your FICO score is a constantly changing thing and how Fair Isaac Corp calculates your FICO score is something they keep to themselves, and it’s also something that changes over time too.

If you have a FICO score of about 780+, you are in the excellent category and you’re already doing great. You can apply for the best credit cards that give you the best rewards. These credit cards will also be the more premium ones to qualify for, and require excellent credit to get.

You’ll also be able to get home loans at the lowest interest rates available. Not only that, lines of credit, car loans, or any type of loan really should come to you at the best rates. Not only that, a great credit score can help you secure a larger loan – though this is also very dependent on how much income you are generating and what other outstanding loans you have at the moment.

How Do You Get The Best Credit Score?

Well, there isn’t really an exact formula to get a FICO score of 850. I have a very very high credit score and have always gotten favourable rates and big loans on my line of credit and credit card limits. I don’t do anything special. My keys to getting a great credit score is pretty simple. Use credit monthly and pay it back in full every month.

For example, my main credit card gets used every month. I also have a line of credit that gets used every month. I never carry a balance on my credit card. It gets paid in full every month. My line of credit I typically don’t use. So I just leave $10 in there and pay the interest (it’s like 3 cents a month) every month. This way, I am “using” my line of credit every month and I pay the interest every month. Since the balance is so low it does not hurt my credit score, it actually helps it. If I had a balance of $25,000 on it and just paid the interest, then this would more than likely hurt me because I am carry a huge balance on my line of credit, which is a big factor in the calculations of your FICO score.

I’ve been doing this consistently since I turned 18 and was only enough for a credit card. And since I was really young, I’ve had a great score and it’s never gone down. So for you, I would focus on using credit every month and paying it in full monthly. It’s the best way to build your credit up and get a perfect credit score – if that’s what you’re after. If there’s another better way please let me know!

I don’t want to disclose my credit score publicly, but it’s pretty damn impressive and it’s been that way for a very long time. It just takes time to get there, but it isn’t any rocket science. So if you have poor credit or just want to increase your credit as high as possible, you can absolutely do it!

What about you? What’s your credit score like and what is your credit score goals? Let me know in the comments below!

Credit Score Ranges: What is a Good FICO Score?

Who has 850 credit score

Generally speaking, a good credit score is anything above 700 points.

However, if you look across the Internet, you’ll see that everyone has their own opinion.

In a way, this makes sense – it reflects the industry.

You see, every single lender has their own criteria when determining an individual’s creditworthiness.

Breaking credit scores down into ranges is the best way to conceptualize your score. It gives you the basis to compare where you are with where you want to go.

It helps you anticipate how you may be treated by potential lenders, insurance companies, and even employers. And it’s how the lenders do it too.

Are you in the good, average or bad credit score range? Find out!

Show my credit score

Continue reading to find out exactly where your credit score puts you in the eyes of lenders.

FICO is the most widely used model so that’s really the only place to start.

The standard FICO credit-scoring scale goes from 300 to 850, with higher numbers reflecting better credit.

Who has 850 credit score

If your score is labeled “excellent”, you’re golden.

This always means you are in the upper echelon of potential borrowers in the opinion of the credit bureau or lender you received the rating from.

It is the best credit score range there is.

You’ve done a superb job managing your finances. You have a long credit history, devoid of late payments, collection accounts, and other negative marks. You also have a stable employment history, experience with various types of credit, and multiple established credit lines.

You’re pretty-much-guaranteed approval, the lowest possible rates, and best terms.

You don’t have to have a “perfect” credit score to get this kind of treatment as the vast majority of lenders give anything in the 800s a pass.

SEE ALSO: How To Get An 800 Credit Score? It’s not as hard as you think!

It’s also important to note, some lenders set the bar for “excellent” as low as 720, others as high as 800. It really just comes down to what type of credit you are applying for and who the lender is.

Who has 850 credit score

To many lenders, there isn’t much difference between 750 and 800. You’re going to get approved and offered the best rates so they might as well just call you “excellent”.

SEE ALSO: What’s The Best Credit Score To Buy a Car?

But there is a difference. One of the most common differences between individuals with scores in this range and in the one above is their debt-to-income ratio. A late payment here and there or some murkiness in your employment landscape could also be holding your score back.

Generally though, you’re a shoo-in for all types of credit. From here, the less your score the bigger the drain on your wallet.

Who has 850 credit score

For the most part, a “good” credit score is going to get you approved.

You just won’t be afforded the lowest rates and VIP treatment like those above.

SEE ALSO: First Time Home Buying: Step By Step Guide

You generally have a well-managed credit history. However, it’s not blemish-free. You’ve had a couple bumps along the way:

Perhaps a collection account or two in your history. Maybe a rough patch of late payments awhile back. Or you might just have a little too much credit card debt. Whatever the case, you have it mostly under control and in the past.

You will be eligible for most loans. And scores in this range won’t hold you back in terms of getting insurance or finding employment.

Those problems start the next level down.

Who has 850 credit score

Also called an “acceptable” or “average” credit score, if you get this label, it probably means your financial situation is trending one way or the other.

You were doing well but have run into some trouble recently.

You are steadily building up your financial foundation after tough times.

When you get into this area, creditors really start to look into the details of your credit report to see exactly why your credit scores are what they are.

For instance, you’ll have a tough time securing credit if the main thing bringing your score down to this level is late payments.

Expect to be asked for down payments or collateral for some types of credit.

Expect higher fees, interest rates, and even insurance premiums.

And don’t expect your “fair” rating to be ignored if you’re looking for a job in the financial, chemical, pharmaceutical, or defense sectors. Opportunities that require a high level of responsibility may not be open to you.

Luckily for you, if you get your affairs in order, you could be in “good” territory in a few months. Emphasize paying on time and reducing credit card debt, and you’ll be in the clear soon.

Because if things get much worse from here, your poor credit score will really begin to weigh you down.

Who has 850 credit score

This is not the place anyone wants to be.

Bad credit is often a direct result of real-life hardships.

Also referred to as “subprime” credit, it’s likely you’ve had multiple or ongoing credit issues. Poor payment history, collection accounts, bankruptcy filings, or out-of-control credit card debt could all be culprits. Likely, a couple of them are working in tandem against you.

Unfortunately, credit scores don’t take into account what may have contributed to your poor credit score. All that really matters to lenders is that you clean it up.

READ NOW: How to clean up my credit report? A step by step guide to raise your credit score fast.

For now, you’ll be subject to the lender’s terms for just about any line of credit for which you can get approval. You might need a cosigner. And you may still need a significant down payment or collateral as well. Mortgage loans are most likely out of your reach completely.

Insurances companies will likely offer you a limited selection of their products and services at much higher rates than your equally-healthy, higher-credit counterparts.

Whatever is going on in your life, you’ve got to get this under control. If you allow things to continue this way, echoes of what put you in this position will continue to affect your future.

Who has 850 credit score

Another barely-necessary designation, some authorities refer to credit below 500 or 600 as “very bad”. But it basically means you are in the absolute lowest credit score range.

When it gets to this point, the only lenders willing to service a loan for you are those who specialize in lending to this group. And it’s unlikely that down payments or collateral are going to help you much at this point.

You’re also going to have a hard time getting insurance. And employers who check credit reports just won’t consider you.

Simply put, this kind of credit score leaves you with fewer options.

And truth be told, you probably shouldn’t pursue any right now anyway.

If you’re credit is this poor, you need to focus on reducing your debt, eliminating collection accounts, and making payments on time.

In all probability, you have a bankruptcy, active judgment, or repossession hurting you score. Or perhaps you have several active collections.

The only other possibility is that you have little to no information on credit report with which to build a score.

Yes, those who have not had accounts that report credit information get stuck with low scores. Luckily though, if you fall into this “credit newbie” group, it will be easier to build your score than someone with accumulated negative marks against them.

But if your credit score falls below 600 for the typical reasons, it might be time to contact a credit counselor and create an actionable plan to get your credit back on track.

Why creditors emphasize the range more than a specific score?

Who has 850 credit score

The reason is this:

Each lender chooses their own specific criteria. And in many cases, credit scores only count as one factor. A major factor no doubt, but the individual creditor gets to choose exactly how they want to evaluate credit applicants.

Because lenders may pull your credit score from multiple sources or may like to look at several different credit scoring models, what becomes important is the range you fall into.

That is basically the purpose of the credit models having these ranges in the first place.

They function as fast-reference for lenders. Therefore, you can use them for the same purpose. So focus on the ranges your scores fall into rather than obsessing over every little point.