The global economic downturn has greatly affected our life, home prices, stock market, credit scores were damaged by the crisis and recession. The situation has changed greatly and the credit standards have become tighter and a number of people had to look for loan modification programs and the ways to negotiate their debts. A new scoring method, FICO 08 was introduced, to raise or lower customers’ credit scores.
Nowadays every consumer should take into consideration the events that take place in today’s economy and do their best to protect their credit ratings. If you have a large credit line closing your credit card can hurt you, especially if you have a low balance, but if the balance is sizable the negative effect won’t be too large.
For the scoring model your earliest credit experience is more important, that’s why it is vital to keep your oldest account open and use it sparingly. Once the account is dropped from your credit report this influences your credit history length and your credit score as a result.
If you search for the most efficient ways to improve your credit score paying off your credit balances as soon as possible. If you are going to get a mortgage modification this can negatively affect your score but a lot depends on how the transaction was reported by the lender. The lender will agree to accept a lower amount that you have to pay if you have a modified loan agreement. If you have “paid as agreed” loan mark this won’t be taken into account by the scoring model. However, if it is reported as “not paid as agreed” then the score may suffer a lot of damage. That’s why it is vital to know how this is reported before you enter into the payment plan.
The scoring model sees the prospective lender’s inquiries, thus, if there are too many inquiries made
within 14 to 30 days they are regarded as one inquiry. In case you have a sub prime or adjustable-rate mortgage this won’t affect your score and isn’t figured into the FICO score. You can refinance to an adjustable rate mortgage and pay lower rates.
Entering into a “partial payment agreement” is the process that will affect your score negatively, because it is reported to the credit reporting bureaus. You can refer to the services of the credit counselor to set up a repayment plan for you. Your goal is to find a reputable and certified agency. You can check whether the agency is the member of the Association of Independent Consumer Credit Counseling Agencies, or stands with the Better Business Bureau, or the Better Business Bureau.
To keep your credit score high efforts and knowledge are required, but this is necessary if you take care about your financial future, moreover you can do it without anybody’s help.
Do you know that the info about your credit score can assist you a lot in taking care of many problems with credit? And do you know that you can get a free credit score?