by Benjamin Kruell on February 18, 2009
I constantly get the question: How can I instantly improve my FICO Score? And the answer is always the same. What is your definition of instantly?
Raising your credit scores is not an over night, quick fix process. It does take some time…however, there are some things that you can do to get improved scores in a month or two.
The first step to instantly improve your FICO Score is to pay your bills on time. 35% of your score is determined by your ability to pay your obligations on time. If you have late payments on your credit report that you believe are inaccurate – get them updated or removed.
The next step to instantly improve your FICO Score is to pay down the balances on your accounts. 30% of your credit score is dtermined by your debt to available credit limits. THE LOWER THE BETTER! If you have a $500 credit card, you should never charge more than $150, or 30%, of the available credit limit. I advise all of my clients to never use more than 10% of their available credit. I have clients who have had great success using this strategy to instantly improve their FICO Scores.
Lastly, and this is the best kept secret that not many people will share with you. One of the best ways to instantly improve your FICO Score is to Opt Out. When you go to Opt Out Prescreen.com you are removing yourself from all the companies that buy lists from the credit bureaus. By removing your information that they purchase you will no longer receive those annoying credit card offers in the mail. For some reason unknown to me this works. I assume that the credit scoring model sees that you do not get the “approved offers” in the mail – won’t go out and get new credit cards – won’t increase your overall debt to credit limits – and rewards you with a score increase. One client of mine did this and got a 30 point increase in two weeks! I should mention that this may not work for you…but at least you won’t be getting all that junk mail.
These tips will help you to instantly improve your FICO Score. See some of the related posts for more ways to improve your credit.
by Benjamin Kruell on February 4, 2009
According to Credit.com Experian sent a letter to MyFICO that could terminate their six year relationship. If this happens it could be disastrous for consumers who manage their credit because they would lose access to one of their credit scores provided by MyFICO.
If the two companies do not reach a compromise by February 14th, 2009, consumers will lose all access to their FICO scores from Experian. However, Experian will continue to provide their scores to Fair Issac so lenders and other businesses who use the score as a determination of a consumer’s credit worthiness.
This is the second threat made by Experian to terminate the contract. Managing your credit is hard enough by credit bureau standards, and taking away the ability to access credit scores could be detrimental to consumers.
Experian will continue to profit by selling their PLUS Score to consumers but we will have no access to our FICO score based on Experian’s data.
This is yet another blow to consumers in this volatile economic time in our countries history.
by Benjamin Kruell on February 1, 2009
The day is finally here! Super Bowl 43 is just hours away. Some of us watch the game itself and others watch for the commercials. For those of you who only watch for the commercials – here are the 10 Best.
NBC is going to make an estimated $200,ooo million in ad revenue this year.
Enjoy the game responsibly and respect others that you watch with.
CHEERS!
by Benjamin Kruell on January 31, 2009
I have been fascinated the last week or so on the tactics American Express is using to profile and analyze their customers spending habits. See a recent post of mine that has a video link for more on this topic.
I found this article written by Ron Lieber on Friday, January 30, 2009 and provided by the The New York Times.
“You probably know that credit card companies have been scrutinizing every charge on your account in recent years, searching for purchases that thieves may have made. Turns out, though, that some of the companies have been suspicious of you, too.
In recent months, American Express has gone far beyond simply checking your credit score and making sure you pay on time. The company has been looking at home prices in your area, the type of mortgage lender you’re using and whether small-business card customers work in an industry under siege. It has also been looking at how you spend your money, searching for patterns or similarities to other customers who have trouble paying their bills.”
Read the entire article…
by Benjamin Kruell on January 31, 2009
by Benjamin Kruell on January 30, 2009
When you’re in your twenties, change is a way of life. You’re choosing a career, paying your own bills, getting your own place to live and perhaps making decisions about marriage and family.
Read full article from Kiplinger.com…
by Benjamin Kruell on January 29, 2009
The rules of credit cards are changing on a daily basis. Credit card companies are now using “behavioral analysis” to determine credit card limits and the reduction of those limits based on what other people are doing! Check out this article from ABC…
by Benjamin Kruell on January 29, 2009
Press Release from Minneapolis, MN and Chicago, IL on January 29, 2009
Fair Isaac announced today that TransUnion is the first credit reporting company to offer Fair Isaac’s newest FICO score dubbed FICO ‘08. TransUnion will market the new score under the product name “FICO Risk Score, Classic 08.”
Good News for Lenders and Credit Providers = Bad News for Consumers with Average Credit
The new scoring model is expected to provide up to twice the power at predicting a person’s credit risk. This improvement will increase the ability of lenders and credit providers to better manage their current portfolios. The new scoring model will also help them to attain better qualified consumers.
“Lenders striving to increase lending while mitigating risk need improved scoring tools that better assess the disparate risk profiles of different customer segments,” said Craig Focardi, research area director for TowerGroup. “Scoring tools also need to help protect against fraud in new credit applications-which remains a big concern for lenders-while still complying with regulations that permit ’Authorized Users’ to establish credit via an existing third-party account. Lenders, guarantors, loan investors and other parties need new analytics to reinvent credit risk assessment and restore the US consumer lending and loan securitization markets.”
“The FICO 08 score represents Fair Isaac’s best analytic work ever on our classic FICO credit risk model,” said Lisa Nelson, vice president of Global Scoring Solutions for Fair Isaac. “We encourage TransUnion’s customers to adopt the new score and take full advantage of its increased predictive power. We designed it to make their conversion to FICO 08 easier, with no major operational adjustments required.”
The new FICO Risk Score, Classic 08 is going to help lenders protect against authorized-user account “piggybacking” by incorporating new patent-pending technology that materially reduces the potential score impact associated with the abuse of authorized user accounts. By continuing to include authorized user accounts in score calculations, the FICO 08 score continues to support lenders’ efforts to comply with federal regulations (TranUnion.com).
There is some positive news for consumers among all this doom and gloom. The new scoring model will keep the same scoring range of 300-850, score reason codes, minimum scoring criteria, and inquiry treatment as previous versions of the score.
Fair Isaac also has developed two industry-specific versions of FICO® Risk Score, Classic 08 for use by TransUnion clients who offer consumer auto financing and bankcards. TransUnion expects to make these new industry option FICO® scores available to lenders starting in April (TransUnion.com).
Fair Isaac, FICO, myFICO, and 300-850 are trademarks or registered trademarks of Fair Isaac Corporation, in the United States and/or in other countries. Cites taken from Transunion.com January 29, 2009.
by Benjamin Kruell on January 27, 2009
This is a fantastic article I came across while doing some research for a client.
It’s a number that lenders may consider when deciding whether or not to lend you money, but it isn’t the well-known credit score. Meet the bankruptcy score, the credit score’s more mysterious cousin.
Are you a bankruptcy risk? Enigmatic score may tell lenders…
by Benjamin Kruell on January 25, 2009
The short of the long is that the Federal Reserve is buying Mortgage Backed Securities. This, among many other factors, is keeping interest rates low. Low interest rates have caused many people, for good reason, to consider refinancing their home loan to lower their monthly payments.
I had a conversation with a “rate shopper” on Friday and wanted to share their concerns about the affect lenders pulling their credit would have on their credit scores.
This was taken from myfico.com.
Looking for a mortgage may cause multiple lenders to request your credit report, even though you’re only looking for one loan. To compensate for this, the score ignores all mortgage inquiries made in the 30 days prior to scoring. So if you find a loan within 30 days, the inquiries won’t affect your score while you’re rate shopping. In addition, the score looks on your credit report for auto or mortgage inquiries older than 30 days. If it finds some, it counts all those inquiries that fall in a typical shopping period as just one inquiry when determining your score.
For FICO scores calculated from older versions of the scoring formula, this shopping period is any 14 day span.
For FICO scores calculated from the newest versions of the scoring formula, this shopping period is any 45 day span.
Each lender chooses which version of the FICO scoring formula it wants the credit reporting agency to use to calculate your FICO score.
