Credit Facts
What is a credit score?
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A credit score is a number generated by a mathematical formula that is meant to predict credit worthiness.
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Credit scores range from 300-850.
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The higher your score is, the more likely you are to get a loan.
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The lower your score is, the less likely you are to get a loan.
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If you have a low credit score and you do manage to get approved for credit, your interest rate will be much higher than someone who had a great credit score and also borrowed money.
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Therefore, having a high credit score can save many thousands of dollars over the life of your mortgage, auto loan, or credit card.
What affects your credit score?
What can I do to improve my score myself?
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Pay all of your bills on time, every time.
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This includes your utility bills, mortgage and auto payments, and all of your revolving lines of credit like credit cards.
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Check your credit report at least once a year
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Never charge more than 30% of the available balance on any of your credit cards
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For example: if your credit card balance is $1,000, never let more than a $300 balance report ​
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If you are carrying high balances on your credit cards, then make paying them down below 30% a priority
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Keep your accounts open as long as possible
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Try not to close out a credit card. this can drop your score
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Unless you are paying annual fee's, we recommend to not close out any cards
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Keep them open and put a very small charge on them every 6 months to keep activity on the account
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If you have cards that you are not using, a creditor is likely to close it due to inactivity ​
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Using a card at least once or twice a year will help to ensure that it remains open
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Have patience!
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​Remember that this all takes time
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Following the above steps consistently over a long period of time will increase your credit score and allow you to qualify for better loans and lower interest rates
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These are all habits that you will want to maintain throughout your life, as they will help you to keep your finances and lines of credit under control.
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Improving your credit score does not happen overnight, so if you do these things for a few months and do not see a large increase in your score, do not give up
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Review what needs to be improved​ again and go from there
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If you still need help, reach out to us!
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How long does information stay on my report?
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Delinquencies (30- 180 days):
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A delinquency may remain on file for seven years; from the date of the initial missed payment.
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Collection Accounts/Charge Off's:
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​Collections will remain on your report seven years from the date of the initial missed payment that led to the collection (the original delinquency date).
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When a collection account is paid in full, it will be marked as a "paid collection" on the credit report.
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A paid collection normally does not come off of your report
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Paying a collection may not improve your score. It can, in some instances, drop your score
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Closed Accounts:
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​Closed accounts are no longer available for further use and may or may not have a zero balance.
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Closed accounts with delinquencies remain for seven years from the date they are reported closed, whether closed by the creditor or by the consumer.
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However, the delinquency notation will be removed seven years after the delinquency occurred when pertaining to late payments.
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Positive closed accounts continue to be reported for ten years from the closing date.
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Once these fall off, your score may drop, so be prepared
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Bankruptcy: Chapters 7, 11, and 12:
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​Chapters 7,11 & 12 will remain on one's credit report for ten years from the filing date.
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Chapter 13 bankruptcy is reported for seven years from the filing date.
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Accounts included in a bankruptcy will remain for seven years from the date reported, and should report as included in the bankruptcy.
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Inquiries:
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​Most inquiries listed on one's credit report will remain for two years.
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All inquiries must remain for a minimum of one year from the date the inquiry was made.
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Some inquiries, such as employment or pre-approved offers of credit, will show only on a personal credit report pulled by you and may be a "soft" inquiry
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While inquiries will be listed on the report for up to 2 years, they will only affect the score for 1 year.
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Information that cannot be in a credit report
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Notice of bankruptcy (Chapter 11) more than ten years old
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Judgements no longer appear on credit reports
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Debts (including delinquent child support payments) more than seven years old
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Age, marital status, or race (if requested from a current or prospective employer)​
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The same collection by more than 1 collection company
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The original creditor and a collection agency can both report the same debt, but 2 collection agencies cannot​
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