Posts Tagged ‘credit score’

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Apparently Debt is the New Cigarettes

Thursday, June 23rd, 2011


(photo credit: paalia)

Now, debt isn’t necessarily a bad thing, okay? But this is a little crazy. For the past 25 years, people in their early and mid-twenties have reported feeling a thrill of maturity and self-confidence when they first started to dig themselves into the debt hole.

Whether the money was going toward education or just going into the “I’ll pay for this pizza later” pile, young adults – especially those in the lowest 25% of income earners – said they experienced greater “self-esteem and perceived mastery” when they began to run up a tab.

Some kinds of debt are better than others. In general, debt that can be considered an investment in something – like a home, or an education that can get you a better job – is a good thing. But debt that gets you nothing but fees, interest rates, and a pizza that has long since been digested and forgotten – i.e., credit card debt – is not good.

The most important factor in determining whether your debt is good or bad is whether you’re able to make payments in full and on time. If you don’t, your credit score will suffer and you’ll find yourself on the road to Massive Debt.

Which, by the time you reach 28 (according to the study), will start to make you feel kind of bad about yourself.

Credit Scores Around the Country [Interactive Infographic]

Tuesday, May 31st, 2011

credit-score-country.png
(click on the map to go to the interactive graphic)

Do you know what your credit score is? Maybe you should try surviving the credit storm before you start buying houses…

(Via Column Five for Credit Sesame)

How can you look at your credit score?

Friday, June 18th, 2010

Checking your credit score is a lot simpler than you may think — in fact, everyone in America is entitled to one free credit report each year from all of the three credit reporting agencies. You can request them online at the fishy-sounding but totally legit and official www.annualcreditreport.com.

You can also buy your credit report, for a nominal fee, directly from each one of these agencies. Make sure you type in the correct website address, because fake websites have similar names and will try to trick you into giving away personal information or signing up for services you don’t want or need.

Can anybody look at your credit score?

Thursday, December 17th, 2009

While your nosy neighbor isn’t allowed to look up your credit score, almost any business with a legitimate purpose can. So what makes a credit inquiry legitimate as opposed to a neighbor’s snooping?

The rules that govern who can look at your scores are spelled out clearly in the Fair Credit Reporting Act. Someone who wants to see your score must have an acceptable business or financial reason to do so. People who are evaluating whether you qualify for credit cards, loans, insurance policies, jobs, or housing rentals all have a “legitimate” reason for looking at your credit score. For those situations, a credit score is vital in determining whether you are a good candidate or not – their businesses depend on this information to know you are consistent, trustworthy, and dependable with money. What this means is that any company that stands to gain from looking at your score is entitled to do so.

In most of these situations, though, a person must first authorize the company to obtain their credit score. If you don’t want your loan adviser to look at your credit score, then he won’t be able to. The only caveat is that if you refuse, you probably won’t be getting that loan…

What happens when you pay your credit card bills late?

Tuesday, October 20th, 2009

When you don’t pay credit card bills on time, your credit score takes a hit, and a low credit score makes your life difficult in multiple ways. Your credit score basically reflects how trustworthy you are when it comes to paying back credit, and any time you need credit or insurance, the lenders involved are going to look at your credit score. A low credit score may be enough reason for a lender to refuse you a loan outright or for an insurer to decide you’re too risky, and even if you are granted credit, it may be at a higher interest rate or with stricter terms and conditions.

Although different companies calculate credit scores differently, paying your bills late is one thing that’s basically guaranteed to lower it. Paying on time, however, has the opposite effect, and the longer you go without missing a payment, the better your credit score looks. Basically, a high credit score tells credit and insurance companies that you’re a responsible person, and they’ll treat you better for it – it’s a way to make a good impression from the start.

Why is it good to have a credit history?

Wednesday, October 14th, 2009

When you’re hiring someone for a job, the best choice is probably a person who has a reputation for doing similar jobs well in the past. Although someone without any established reputation is better than someone with a bad reputation, he’s still something of a gamble – you have no special reason to think he won’t perform the job well, but no reason to believe he will, either.

Credit history follows the same principle. It’s basically a record of how you’ve used credit in the past. How much do you owe right now? Have you made your credit payments on time? Have you had any financial problems? In credit as in anything else, a long history of good behavior is a great asset because it inspires trust. For example, a bank may be more inclined to let you take out a loan if you have an excellent credit history; if you’ve repaid your debts in a timely manner in the past, odds are you’ll deal with their loan in the same way.

A Credit Rating is…

Friday, September 18th, 2009

A credit rating is like a grade given to a person, business, or even a country, that says how likely that person is to make payments on a loan as promised. Credit ratings for people are called credit scores and are maintained by credit bureaus like Experian and TransUnion. Credit rating agencies like Moody’s or Standard and Poor’s give ratings to companies and countries that tell investors how safe it is to buy their securities, like bonds or stocks.

A Credit Bureau is…

Thursday, July 30th, 2009

A credit bureau is an agency that keeps track of how consistently you make payments on debts (like credit card bills) so creditors, like banks and credit card companies, can make sound decisions about whether and how to lend you money.

What’s the difference between a credit score and a credit rating?

Thursday, July 30th, 2009

A credit rating is like a grade for how likely an individual, company, or even a country is to pay back debts on time. Credit rating agencies or bureaus keep track of relevant information about a person, company, or country to determine their credit ratings.

A credit rating for an individual is called a credit score and is a three-digit number, like a batting average in baseball. Credit bureaus (like Equifax or TransUnion) look at how consistently you pay your bills and then publish your credit score, which creditors like banks use to determine how much they are willing to loan you.

Commercial credit rating agencies like Moody’s or Standard & Poor’s assign ratings to companies – from AAA down to D – that reflect how likely it is that the company will pay back dividends on your investment. Some rating agencies also give sovereign credit ratings, i.e. ratings for countries. These ratings give you some idea of how safe it is to invest in that country and take factors like political stability into account.

Your credit score tells creditors (like banks) if you are a good investment or not. Corporate and sovereign credit ratings can help you decide what might or might not be a wise investment.

A Credit Score is…

Thursday, July 30th, 2009

A credit score is a number that describes how well you make payments on things like credit cards. It’s like your debt-repayment batting average. Credit bureaus keep track of your credit history and publish that information in the form of a 3-digit credit score, which can affect how creditors – like banks and even insurance companies – will do business with you.

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