Consumer Credit Counseling in Arizona call 1-800-254-4100
Our Promise To You: We will help you get out of debt totally for free. All you have to do is tell us your situation, ask us your question and we will help you find a, honest and truthful solution to resolve your debt and credit situation. We Are Here For You!
Debt without any collateral that can be taken back if you don?t pay.
Examples: credit cards, dept. store cards, personal loans, cell phone bills, legal bills, medical bills, credit lines, health club memberships.
No mortgages, auto loans, etc.
Step 1: A debt consultant will contact you over the phone for a free counseling session. He'll review your financial situation and suggest the right solution to your debt problems.
Step 2: With your approval, the consultant will start contacting your creditors for a negotiation. The purpose here is to reduce your outstanding debt amount or lower interest rates and eliminate late fees/penalty charges. The consultant will also help you to avoid harassing calls from creditors and collection agencies.
Step 3: The consultant will provide you with budgeting tips so as to help you manage your money better. He'll also guide you on how to rebuild your credit and raise your credit score.
Understanding Your Credit Score
What does your score mean?
This rating system is meant to develop a snapshot of the risk you currently represent to a lender. Several parameters in your credit file, including length of credit history, number of open accounts, loans, mortgages, public records, and others are formulated to produce a three-digit score between about 300 and 950. There are other scores used by lenders and insurance companies (some of which are developed by FICOŽ) such as Application and Behavior scores. These other scores take other information into account. Usually a lender will use a combination of your credit score with other factors when determining your risk. They all have the same objective, to determine the borrower's potential risk. Regardless of whether the score was generated by FICOŽ or a system based on FICOŽ parameters, they all yield an industry standard three-digit score. This score places the borrower in one of three main categories (we named the third one ourselves.)
Prime, sub-prime, and shafted
Prime If your credit score is above 680, you are considered a "prime borrower" and will have no problem getting a good interest rate on your home loan, car loan, or credit card.
Sub-Prime If your credit score is below 680, you are "sub prime", and will likely pay a much higher interest rate on your loan.
Shafted Below 560 is the shafted score. At least that is how most lenders and credit issuers perceive it. You can still get a credit card but you will likely be hit with a security deposit or high acquisition fee. In addition to that your interest rate will likely be 22 to 23%. You can forget about most home loans and the majority of new car loans at this score. Below 560 is no place to be. You will pay much, much more in higher interest and unnecessary fees. You may even pay more for your insurance rates. A very low score can even prevent you from getting a job with many companies. If your in this catagory Click Here.
How are credit scores calculated?
The methods of calculating your credit score may differ slightly depending on the credit bureau. When obtaining your score from one of the Credit Bureaus it is important to understand that your score does not come directly from FICOŽ. It is adapted to each bureau and is given its own name: Equifax uses "Beacon", Trans Union uses "Empirica", and Experian uses "Experian/Fair Isaac." These scores are also referred to as your "Bureau Scores."
Since your score is derived from your bureau data, it will change every time your reports change. However your score is calculated, it will always take into consideration many categories of information. No one piece of information or factor determines your score. As the information in your credit report changes, the importance of one or several factors may change in your score. Lenders look at many things when making a credit decision, including your income and the kind of credit you are applying for. However, your credit score does not reflect these facts as it only evaluates the information retained by the credit reporting agency.
To Learn More Click here.
What factors affect your credit score?
There are five factors which are used in credit scoring calculations that determine your overall credit score.
Previous Credit Performance (Payment History) 35% A lender wants to know what your payment history is like. Have you paid everything on time, are you late on anything now, and so on. Your payment history is just one piece of information used in calculating your score, although it can be the very important.
Current Level of Indebtedness (Amount Owed) 30% How much is too much? Can the borrower pay me and still afford to pay his other bills? Not necessarily. Having available credit can actually help your ratio of debt to available credit. These are the types of questions that most borrowers want to know and the answers are almost as important as your previous credit history.
Amount of Time Credit Has Been In Use (Length of Credit) 15% Generally speaking, the longer the credit history the better your score. However, this factor only makes up 15% of your total score so even young people, students or others with short histories can still score high overall as long as the other factors show good. If you are new to credit than there is little you can do to improve this part of your score. Open an account and be patient.
Pursuit of New Credit (10%) Credit is much more popular today. Just look at the number of credit card offers you get via the Internet and in the mail. Consumers can now shop for credit and find the best terms to meet their needs. Each time someone runs a credit check on you, it creates an inquiry.
Fair Isaac has changed some of its calculations to account for these new trends. Specifically, they treat a group of inquiries - which probably represents a search for the best rate on a single loan - as though it was a single inquiry (note: this only applies to auto or mortgage loan inquiries.) For example, auto loan inquires that are within 14 days of each other only count as one inquiry.
Types of Credit Experience (10%) A healthy mix of different types of credit, installment loans, retail accounts, credit cards, and mortgage. This score is not normally a key factor in determining your score but it can help a close score. Its not a good idea to try and open different types of accounts just to try and make this factor better. It will likely reduce your score in other areas. You should never open accounts you don't intend to use anyway.
What type of accounts you have, and how many, can make a big difference. The optimal ratio of installment versus revolving accounts depends on your profile and differs from person to person. One factor that seems to have significant influence is your percent of open installment loans. Too many can lower this portion of your score. For more information Click here.
Now that you know how your score is calculated, you can begin making changes to your current financial planning. The best things you can do are simple.
Pay your bills on time. Sounds simple, but this is the biggest thing you can do to keep your score high. Delinquent payments and collections have a major negative impact on a score.
Keep your balances low on unsecured revolving debt like credit cards. High outstanding balances can affect a score.
The amount of your unused credit is an important factor in calculating your score. You should only apply for credit that you need.
Make sure the information in your credit report is correct. If its not, dispute it with the credit agencies and/or with the creditor directly.
Removing negative items on your credit reports has the biggest impact on your credit score. Generally, negative items stay on your reports for seven years but you can hire a professional credit report repair service such as Lexington Law Firm to do it for you.
You can try to understand the laws and your self, but we have found it's so much easier to have someone do it for you. We strongly recommend using Lexington Law Firm, they are the industry leaders.
FAIR USE NOTICE consumercounseling.org This site contains copyrighted material, the use of which has not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of environmental, political, human rights, economic, scientific, and social justice issues etc. US LAW We believe that our use of any such copyrighted material constitutes a 'fair use' as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. For more information go to: preview Law Cornell Edu.
FTC Notice Beginning December 1, 2009, the U.S. Federal Trade Commission (FTC) began enforcing new rules regarding transparency in advertising relations between product endorsers, advertisers, affiliate marketers, product reviewers, bloggers, celebrities, and other marketers, and the general public. Opinions on this blog/website are our own or others we have designated as contributing authors. No one else is responsible for the content. We have not received any compensation for writing posts, articles, reviews, or other content, and we have no material connection to the brands or products mentioned, except as noted below. We do not accept free products from manufacturers or advertisers or free books from writers and publishers in exchange for a review or an article. All of the product reviews on this blog are influenced solely by the performance of the product itself. We do not receive any kind of monetary compensation for content or reviews including cash or free products.
Affiliate Notice We maintain an affiliate/publisher/republisher relationship with hundreds of companies. This page may contain “affiliate links” to one or more of these companies. An affiliate link is a special URL to the affiliate merchant which lets him/her know you reached his/her site/sales page through my recommendation, text link, or banner ad. If you follow an affiliate link from this website and purchase a product or service, or complete a lead form, we hope to be paid a commission from the affiliate or CPA merchant. Affiliate links may be textual or banner or both. This site may contain in-context textual ads or banner ads, such as from Google, or others over which we have no control over the content. We may or may not have an affiliate/business relationship with the companies advertising on those services. If you click on one of these links, we hope to be paid a small sum for sending you to that merchant’s site. Otherwise, we would have no reason to give Google and others space on this website.You should consult the respective privacy policies of these third-party ad servers for more detailed information on their practices as well as for instructions about how to opt-out of certain practices. We cannot control the activities of other advertisers or web sites. Unless otherwise stated, the website guest or visitor should assume that any link to a third-party vendor is a paid link, and that the author or website owner may receive compensation for that link.
Legal Information Is Not Legal Advice This site provides information about the law designed to help users safely cope with their own legal needs. But legal information is not the same as legal advice -- the application of law to an individual's specific circumstances. Although we go to great lengths to make sure our information is accurate and useful, we recommend you consult a lawyer if you want professional assurance that our information, and your interpretation of it, is appropriate to your particular situation.
Consumer Credit Counseling Information, Debt Management Plan Information, Debt Settlement Plan information, Credit Counseling, Credit Score, Consumer Credit Counseling Service, CCCS, Bill Consolidation, Credit Repair, and Debt Consolidation is not advice, and we recommend you consult a licensed credit counseling agency, debt settlement attorney, and/or licensed debt management plan administrator in your state if you want professional assurance that our information, and your interpretation of it, is appropriate to your particular situation.