As a consumer, we need to understand the meaning of the word credit. Credit is considered as either secured or unsecured monies loaned to you by a lender, in return for future payment. Lenders or creditors who have advanced to you monies to purchase your home or credit card companies/retail stores which allow you to charge purchases with the understanding you will pay them principal and interest over a period of time.
A good credit score means you are a low risk consumer while a lower credit score means you are a riskier borrower. Credit scores from the three major credit bureau’s (Equifax, Experian or TranUnion) range from 300 to 850.
However, according to a recent article in “USA TODAY”, lenders are clamping down on credit and credit scores are taking a hit. The lenders are reviewing all of their consumer credit cards and making determinations about who is using their credit cards. Lenders are closing credit card accounts and lowering credit limits for millions of consumers who have never paid late. When a card is closed by a lender this effects your credit score.
However, maybe as a consumer you had a fair to good credit score. But do to the recent economic environment you are not able to keep up with your financial obligations. This is going to affect your credit score since late payments, mortgage modifications and high balances are now taking a bigger toll on your scores.
So when you are looking at debt settlement program and you are informed that your credit score will take a hit. You credit score may had already taken a hit because of your late payments and too much credit with high balances prior to entering into a debt settlement program.
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Posted in credit scores
Credit card companies are hurting your credit score with the new rules that are coming out. Across the board credit card companies are cutting credit lines, lowering credit spending limits and closing credit card accounts. Well this may seem benign to some it is actually hurting your credit score. When your credit card is closed, all of your credit history goes with it. Continue Reading »
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Posted in General Debt Articles
What happens to my fico score if I am reported late? If you are late paying on your credit card bill by thirty days or more, it will get reported to the credit bureau as a late. I have seen credit scores drop as much as 100 points just by having one late payment. If you are trying to buy a home and the credit late is within a 12 month period it may keep you from being able to buy or refinance your home.
Does having to pay the late fee automatically mean that I will be reported as late to the credit bureau? Continue Reading »
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Posted in Credit Card Articles
