Kelli Smith asked:


Student loans can help you develop and build your credit score. Employers may review consumer credit scores as part of their hiring process. You can optimize educational and career opportunities by building and maintaining a solid payment history.

A credit score indicates how consumers handle debt. Understanding how credit scoring works is useful for making decisions about student educational loans and other credit that can potentially impact your education and career goals. The Fair Isaac Corporation developed its credit scoring (also known as FICO scoring) system based on weighting five aspects of a consumer’s credit history to achieve a score between 300 and 850.

How is my FICO Score Computed?

35% = Payment history: This category includes payment information on retail accounts, auto loans, mortgages, revolving credit, installment debt, and student loans. Delinquencies, repossessions, bankruptcies, wage garnishments, and liens are included. Public filings such as legal judgments can also show up and negatively impact your score, even if paid. Negative items on your payment history can lower your credit score for 7 to 10 years!

30% = Amounts owed: This category includes how much you owe and the percentage of available credit used for revolving accounts. A good way to improve your credit score is to avoid running up large balances or using more than 30% of your available credit.

15% = Length of credit history. The average consumer has approximately 14 years of credit history, but this isn’t necessarily true for students or those who’ve recently started careers. Repaying student loans on time provides a solid foundation for establishing a good credit score.

10% = New credit: Credit scores reflect new credit activity. Opening too many accounts too quickly can drop your credit score. It’s important to understand the difference between opening new credit accounts and credit inquiries; for example, if a potential lender or employer makes an inquiry it impacts your credit score less than applying for several credit cards in a short period of time.

10% = Types of Credit Used: The types of credit you have influences your credit score. Financial expert Suze Orman categorizes student loans as “good debt,” like mortgages or auto loans, but advises against opening and carrying balances on multiple credit cards. College students may be tempted to use credit cards as a financial “bridge” until payday, but this can result in accumulating excessive debt.

Student Loans: The Gateway to Your Future

As the cost of undergraduate, graduate, and professional education continues to increase, students are taking advantage of low cost federal student loans. According to the Project on Student Debt and the College Board’s Center for Economic and Policy Research, approximately two-thirds of recent graduates carry student loan debt and over the past decade, student debt levels have more than doubled.

These figures suggest that many students start their careers with significant debt before they’ve had a chance to build a solid credit score. As public academic institutions continue to face budget cutbacks and tuition increases, students may have to rely more heavily on student loans and credit cards to get by; this can have negative consequences for students’ credit scores and may even delay or divert career plans.

Career Transitions and Your Credit Score

If you’re considering a mid-life career change, a good credit score can help you obtain financing for the transition to a new career. It’s important to weigh short and long term financial goals when considering taking on student loan debt. Consulting a financial advisor can help establish a plan to fund your career transition while protecting your credit score.

Consolidate Student Loans

Traditionally, the interest rates for federal student loans are low–between 5% and 7.22%. Students can include multiple student educational loans that have different or variable interest rates into one consolidation loan with a fixed interest rate and single payment. The interest rate for consolidation loans is based on a weighted average of the interest rates of the different loans included in the consolidation.

Federal student loan interest rates are adjusted on July 1 and, on July 1, 2008, are expected to decrease significantly. Consolidating student loans fixes your interest rate and can help you avoid late or missed payments caused by managing multiple student loans; you may want to wait until after this year’s interest rate adjustment, however, to make an informed decision whether or not to consolidate.

When Should I Consolidate My Student Loans?

Students often consolidate loans during the grace period immediately following graduation, but it’s also possible to consolidate while you’re still in school. This may get you a lower rate on your consolidation loan but be aware that some loan cancellation or other specific loan benefits could be lost if you consolidate before you graduate or during your grace period.

Understanding Student Loan Debt

Unfortunately, it can be tempting to borrow more than you need for educational expenses. And it’s easy to forget that unlike grants and scholarships, student loans must be repaid, which can cause financial problems and damage your credit before you even have a chance to establish a good credit history. Late payments and collection activity on student loans leads to low credit scores–especially if, like many students, you have a short or limited credit history. A low credit score can limit the availability of some student loans and other types of credit including mortgage loans. And borrowing more than you need may affect your plans long after you’ve graduated–a 2006 Money Magazine article describes how some college grads are delaying buying a home or starting a family while they repay large student loan balances.

The Connection between Your Credit Score and Career

A spotty credit history can not only make it hard for you to get approved for loans, it could even ruin your career plans. Low credit scores can limit access to business loans and prospective employers often conduct background checks that include verifying your credit score. When you interview for jobs you may be asked to sign an authorization that allows prospective employers to check your background. Employers in the financial and retail industries and professions such as accounting and law typically use background checks as part of the hiring process, and a low credit score is a valid reason to deny employment.

Careful use of student loans can provide for your education and help avoid unnecessary debt. Managing student loan debt through prompt repayment and possibly consolidation can help establish a good credit score. Your education and credit score can open doors to your new career, and later, help you get financing for expanding a business, starting a company, or investing for your future.

keith williams asked:


Improving your credit score is very important and simple to do. Some people feel like giving up on situations like this not knowing the easy steps and procedures it takes to get on the right track to boost their credit score. You can get on the right track by simply taking these 8 tips to improve your credit score.

Tip #1 Understand where credit scores come from.

If you are going to improve your credit score, then logic has it that you must understand what your credit score is and how it works. Without this information, you won’t be able to very effectively improve your score because you won’t understand how the things you do in daily life affect your score.

If you don’t understand how your credit score works, you will also be at the mercy of any company that tries to tell you how you can improve your score – on their terms and at their price.

In general, your credit score is a number that lets lenders know how much of a credit risk you are. The credit score is a number, usually between 300 and 850, that lets lenders know how well you are paying off your debts and how much of a credit risk you are.

In general, the higher your credit score, the better credit risk you make and the more likely you are to be given credit at great rates. Scores in the low 600s and below will often give you trouble in finding credit, while scores of 720 and above will generally give you the best interest rates out there. However, credit scores are a lot like GPAs or SAT scores from college days while they give others a quick snapshot of how you are doing, they are interpreted by people in different ways. Some lenders put more emphasis on credit scores than others.

Tip #2 Keep the contact information for credit bureaus handy.

The three major credit bureaus are important to contact if you are going to be repairing your credit score. The major three credit agencies can help you by sending you your credit report. If you find an error on your credit report, these are also the companies you must contact in order to correct the problem. You can easily contact these organizations by mail, telephone, or through the Internet

Equifax Credit Information Services, Inc Address: P.O. Box 740241

Atlanta, GA 30374

Telephone 1 888 766 0008

TransUnion LLC Consumer Disclosure Center Address: P.O. Box 1000

Chester, PA 19022

Telephone 1 800 888 4213

Experian National Consumer Assistance Center Address: PO Box 2002

Allen, TX 75013

Telephone 1 888 397 3742

You may want to note this information wherever most of your financial information is kept so that you can easily contact the bureaus whenever you need to. Your local yellow pages should also have the contact information of these credit agencies as well.

Tip #3 Develop an action plan for dealing with your credit score.

Once you have your credit report and your credit score, you will be able to tell where you stand and where many of your problems lie. If you have a poor score, try to see in your credit report what could be causing the problem:

Do you have too much debt?

Too many unpaid bills?

Have you recently faced a major financial upset such as a bankruptcy?

Have you simply not had credit long enough to establish good credit?

Have you defaulted on a loan, failed to pay taxes, or recently been reported to a collection agency?

Tip #4 Pay your bills on time.

One of the best ways to improve your credit score is simply to pay your bills on time. This is absurdly simple but it works very well, because nothing shows lenders that you take debts seriously as much as a history of paying promptly. Every lender wants to be paid in full and on time.

If you pay all your bills on time then the odds are good that you will make the payments on a new debt on time, too, and that is certainly something every lender wants to see. Experts think that up to 35% of your credit score is based on your paying of bills on time, so this simple step is one of the easiest ways to boost your credit score.

Tip #5 Avoid excessive credit.

If you have many lines of credit or several huge debts, you make a worse credit risk because you are close to “overextending your credit.” This simply means that you may be taking on more credit than you can comfortably pay off. Even if you are making payments regularly now on existing bills, lenders know that you will have a harder time paying off your bills if your debt load grows too much.

The higher your debts the greater your monthly debt payments and so the higher the risk that you will eventually be able to repay your debts. Plus, statistical studies have shown that those with high debt loads have the hardest time financially when faced with a crisis such as a divorce, unemployment, or sudden illness.

Tip #6 Pay Down Your Debts

If you have a lot of debt, your credit score will suffer. Paying down your debts to a minimum will help elevate your credit score. For example, if you have a $1000 limit on your credit card and you regularly carry a balance of $900, you will be a less attractive credit risk to lenders than someone who has the same credit card but carries a smaller balance of $100 or so. If you are serious about improving your credit score, then start with the largest debt you have and start paying it down so that you are using a less large percentage of your credit total.

In general, try to make sure that you use no more than 50% of your credit. That means that if your credit card has a limit of $5000, make sure that you pay it down to at least $2500 and work at carrying no larger balance. If possible, reduce the debt even more. If you can pay off your credit card in full each month, that is even better. What counts here is what percentage of your total credit limit you are using – the lower the better.

Tip #7 Have a range of credit types.

The types of credit you have are a factor in calculating your credit score. In general, lenders like to see that you are able to handle a range of credit types well. Having some form of personal credit such as credit cards and some larger types of credit such as a mortgage or auto loan and paying them off regularly is better than having only one type of credit.

Tip #8 Look out for identity theft.

Many people who are careful about paying bills on time and having minimal debts are shocked each year to find that they have low credit scores. In many cases, this happens as a result of identity theft. Identity theft is a type of crime in which people take your personal information and steal that information to pose as you in order to get access to your accounts or identity.

For example, someone with your PIN numbers can remove small amounts of money from your bank account each month or someone can use your name and personal information to get credit cards in your name and use those credit cards with no intention of paying back the money. You are stuck with the large debts and the poor credit score.

To prevent identity theft, always check your account statements carefully each month. Report any suspicious activity or any charges you don’t recognize at once. Also check your credit report regularly and immediately investigate any new credit accounts you do not recognize – this is the best way of detecting and acting on identity theft.

ruben218 asked:


I am a mortgage loan officer and always send customers who have credit issues to a credit company to clean off their credit. I know people can do this on their own, but many do not have the knowledge and time to do it. I have also cleaned customers credit myself including mine and my wife`s and friends and family members but i have been doing it for free. How do i go about it in opening my own credit repair company? Where do i start?

Michael Rasco asked:


A person’s credit score, often referred to as their “FICO” score, is an important tool that lenders use to help determine the creditworthiness of a potential borrower. If you want to make a large purchase, such as a house, for which you will need financing, you want your score to be as high as possible. To understand how to improve your overall credit rating, it is imperative you understand what factors influence your FICO score.

Payment History

Do you pay your bills on time? Most creditors, lenders, and service providers will charge a fee if you do not. Obviously, the biggest thing wrong with that is the egregious waste of money. What is worse in the long term is that after 30 days of nonpayment, the lender will likely report you to one of the major credit bureaus. (In the U.S., there are three such credit bureaus: Experian, Equifax, and TransUnion.) Considering that thirty-five percent of your credit score is based on payment history, it becomes clear how important it is to keep up with your financial obligations. No other single factor has that much influence on your FICO score.

Debt to Total Credit

The ratio of your outstanding debt to the total of your credit lines and loan amounts counts for thirty percent of your credit score. For example, if you have a credit card with a limit of $5000, and you owe $4000, your debt to total credit ratio is eighty percent. After paying down $3000 of the principle, your outstanding balance is $1000, giving you a ratio of twenty percent, which is much better.

If your outstanding balance occupies seventy percent or more of your total credit line, it is viewed negatively by the credit bureaus. If the ratio is in the range of thirty to seventy percent, it is doing little or no harm to your credit score; however, it certainly is not helping your credit score. Bring your debt to less than thirty percent of your total available credit, and your FICO score will very likely improve. Getting balances and, therefore, debt to credit ratios down to zero is clearly a desirable goal. It is important to remember, though, that unused credit will not help your credit score. We will explore that topic a bit later.

Length of Credit History

Fifteen percent of your FICO score is based on how long you have had some type of credit. The perception is that someone who has owned a credit card for twenty years is more likely to be responsible and credit worthy than a young person right out of high school who has the same credit card. Although this is true generally, it is certainly not always the case; that is why it is weighted significantly less than payment history and the debt to credit ratio.

New Credit

If you have one credit card for ten years, and then you apply for and receive three more credit cards, expect your credit score to come down a bit. A long-established credit account is considered more stable than a new account. Of course, how your credit score reacts to new credit is also affected by other factors. A new card will increase your total credit line, thereby reducing your debt to credit ratio. An old credit account with a poor payment history is worse than a new account in good standing. All things being equal, new credit is not bad, but old credit is very good. New credit accounts for ten percent of your FICO score.

Unused credit is considered very much like new credit. If you can use a credit card every month, and pay off the balance in full every month, you will see your credit score increase steadily. This is difficult for many people, because of the temptation to overuse the credit card. Responsibility and restraint are critical when using this technique. Remember that, even though unused credit is not very good, it is not at all bad; overused credit is.

Types of Credit Used

The remaining ten percent of your credit score is based on what type of credit you have used. A retail store credit card is not very good. Too many of them could be bad for your credit score, in fact. Small loans, if paid off in a timely manner, have a positive effect. Major credit cards are even better. Big ticket items like auto loans and home mortgages are very good, once again if you make the payments on time.

These five areas are the basis for your FICO score. Armed with this knowledge, you are better equipped to make the changes necessary to improve your credit score. An overwhelming majority of lenders will use your FICO score when considering your application. Put yourself in position to get the best possible deal. Read this article again, and then get started!

sexysandor asked:


Trying to repair my credit,I do not want to pay someone to do this. What is the best way to do this, and where do I start?

Jason asked:


Credit Score is an important factor considered by creditors, money lenders and other financial institutions. This score is studied and the risk involved in lending money to you is evaluated. This puts you in one of the two categories, high risk borrower and a low risk borrower. Therefore, it is very important to maintain a good credit score.

The following points illustrate the importance of having a good credit score:

The Potential lenders, banks, credit card companies and employers measure your credit worthiness with the help of your credit score. Your credit score can change daily with the change in the information in your credit report. A good credit score will allow you to stay on the top of your credit and will make you eligible for easy loans.

Online Credit Score

Your credit score is a reflection of your credit worthiness. It is made up of a three-digit number, which is evaluated using your credit related information like your credit history, current indebtedness, and other credit report information. With the increase in Internet technology, you can now get your credit score online. There are many companies that offer this service to you. Many companies even provide free online credit score, if you order a complete credit report.

Raising Credit Score

You should not be under this misconception that a bad or poor credit score will always remain poor. You can improve your credit score but it takes some time. Similarly, a good credit score does not guarantee that it will always remain good. If you become careless with your bills and credit card payments, soon it will start reflecting on your credit score. The simple thing that you can do to improve or raise your credit score is “make timely payments”.

Get your credit score checked today!

For further details you can visit us at Free Credit Score Online or you can log on to our website http://credit-free-online-score.info.