5 Big Credit Mistakes You Should Avoid at All Costs

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When it comes to credit, some people prefer the ignorant bliss method: Don’t look at your credit, don’t worry about your credit, don’t even think about your credit. This method can actually be quite effective for several months or even years – that is until you’re thinking about buying a new home, leasing a new car, financing a new computer, or whatever else you've been dreaming up.   When you’re actually looking for credit, it will quickly become clear that the ignorant bliss method was a mistake. Those financial decisions you carelessly made might actually hurt your FICO® Scores or credit history.   You don’t have to be the type of person that worries about credit constantly (although a periodic review of your FICO® Scores and credit reports is always a good idea). … [Read more...]

President Obama says credit scores are an “early warning system” for fraud. Is he right?

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On Jan 12th, in his lead-up to the 2015 State of the Union Address, President Obama gave a speech at the Federal Trade Commission outlining proposed legislation that would help “better protect American consumers from identity theft and ensure our privacy.”   In addition to previewing a new data breach notification law, which would require businesses to notify consumers of a breach within 30 days, the President lauded the recent efforts of several lenders who are offering free FICO® Scores to their customers.   He specifically thanked JPMorgan Chase, Bank of America, USAA, the State Employees’ Credit Union, and Ally Financial  for “stepping up and equipping Americans with another weapon against identity theft, and that’s access to their credit scores, free of … [Read more...]

4 credit score factors investors
should watch out for

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If you’re an investor, you know the value of making every dollar work for you. That’s why your FICO® Scores are so important. Since 90% of top lenders use FICO Scores to help make lending decisions, a high score will improve your chances of qualifying for the best rates and offers—which ultimately means more money in your pocket from investments.   On a $216,000, 30-year fixed-rate mortgage, the difference between a 620 FICO Score and a 760 FICO Score could be the difference between a $1,139 and $941 monthly payment. FICO Scores make a difference when it comes to investing.   With that in mind, here are four FICO Score factors any prudent investor should be aware of.   1. Do your rate shopping within a short time period Applying for mortgages, loans, and … [Read more...]

These 4 Credit Scoring Myths Could Be Hurting Your Scores

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Some myths are innocuous. Thinking that the Great Wall of China is visible from space (it’s not) or that sharks don’t get cancer (they do) won’t have much of an impact on your life.   The same can’t be said, however, for some of the common misconceptions about credit scoring.  If you believe any of these 4 credit scoring myths, you could be doing damage to credit score without even knowing it.   1. “My poor score will haunt me forever” Believing this myth has the effect of a self-fulfilling prophecy. If you think that trying to rebuild your credit is futile, there’s little chance you’ll take the necessary steps to start down the path toward a higher score.   The truth is, even something as devastating to your score as a foreclosure can be rebounded from … [Read more...]

Should I Transfer My Credit Card Balance to Another Credit Card?

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If you’ve been stuck on the credit card debt treadmill for a while, struggling to make anything more than the minimum monthly payments, you’re probably looking for a way out.   Maybe at some point this brilliant idea occurred to you (maybe it was in the middle of the night and it came to you in a dream and you shot straight up like they do on TV and said it aloud): “I know what I’ll do! I’ll pay off my credit card with another credit card.”   Yes, you can use one credit card to pay off your balance on another—though it isn’t all that simple and comes with a few caveats.   First thing: You can’t actually pay off credit debt with credit. Unfortunately, none of the major credit card issuers allow credit card debt payment by credit card.   And … [Read more...]

How Identity Theft
Can Impact Your Credit Scores

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When people think about identity theft, they often focus on credit card fraud—someone racks up fraudulent transactions on your debit or credit card. This type of identity theft can be extremely frustrating, but luckily, credit card companies and banks have security measures and processes in place to keep your cards protected. It’s the other types of identity theft you have to worry about.   Other types of identity theft show symptoms slowly. You might not know about the theft for weeks, months or even years after it occurs. Most victims, a whopping 72%, don’t even know where or when the theft occurred (http://www.identitytheftassistance.org/pageview.php?cateid=47).   And then one dismal day, you’ll discover that an identity thief has opened up loans, taken on a … [Read more...]

4 Surprising Things
That Cause A Hard Inquiry

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When you’re focusing on improving your credit, every bit of credit activity is crucial. You’ve been tirelessly working to pay off debt and manage your credit responsibly. The last thing you need is for a hard inquiry to hit your credit report and potentially impact your FICO® Scores.   What’s an inquiry? Inquiries occur when someone checks, or inquires about, your credit. They are often also called credit checks. There are two categories of credit inquiries—one that your FICO Scores consider and one that your FICO Scores don’t consider.   A “hard” inquiry occurs when you authorize a lender or other entity to view your credit reports and FICO Scores.  Since you authorized this inquiry, it’s often called a “hard” inquiry. Hard inquires can impact your FICO Scores as … [Read more...]

Why credit scores matter

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When you apply for a loan, you’re probably thinking about your brand new house or car. When you apply for credit, you’re probably thinking about what you’re going to purchase. Maybe, just maybe, you’re thinking about your monthly payments. What you’re probably not thinking about is your FICO® Scores. But your lender most likely is.   The loan process often has multiple steps, and only a few seconds on the radar is the part where you agree to a credit check. But that’s a very important step! In fact that little step could have a substantial impact on your monthly payment.   90% of top U.S. lenders use FICO Scores when making lending decisions, and your scores can have a substantial impact on your loans. Here are a few reasons why your FICO Scores … [Read more...]

FICO, President Obama and the future of consumer protection

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  Friday morning was a momentous day for FICO—and for American consumers. President Obama arrived at the Consumer Financial Protection Bureau on Friday to sign an executive order to improve consumer protection and identity theft prevention. The initiative is called the BuySecure program.   FICO was an active participant in this event, and we are honored to be able to contribute to the program.   Millions of Americans have fallen victim to data breaches in the last year as a result of weak security systems. Because of this, the President has decided to take action. Before signing the executive order, President Obama explained, “we've all experienced the benefits of new technologies that let us buy and sell things faster and more efficiently than ever before. … [Read more...]

Understanding how lenders
use credit scores

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You already know that most of the top lenders (90% of them) use FICO® Scores (the top name in credit scores) when making lending decisions (probably because we’re always telling you about it). But what does that actually mean? What really goes down when you apply for a loan? Whether it’s an automated approval process or a 60-day mortgage close, a lender is doing a lot to figure out if you’re going to pay them back on time or not. Here are a few things that might help you understand the approval process.   FICO Scores are designed to help evaluate your risk FICO® Scores aren’t just an arbitrary number provided on a whim. They are based on complex, mathematical algorithms that statistically evaluate a consumer’s credit risk with a point system. Points are assigned for … [Read more...]

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