Protecting your credit during the holidays by MyFICO.com

Listen to the story of 3 people, and how their choices affect their FICO score after the holidays are over.

This is great info to help you keep a handle on your scores, especially important if you are thinking about buying a home in the first half of 2010!

Click Here for the Video

Now FICO has a new website where you can get advise about how to improve your scores and how they affect the quality and types of loans you are offered.

MyFICO.com

From their Website: “Quite simply, FICO scores are the credit scores most lenders use to make lending decisions about you. The higher your score, the less risky you are in the eyes of a lender.”

Outside of the EDUCATION and COMMUNITY sections of the website there are a lot of Products for sale on their website, so keep an eye on what section you are in if you aren’t interested in buying stuff!

APR estimator by FICO score

Mortgage Rates

The website has a great tool to show you how your APR is affected by your credit scores.  You tell it what area it should look at for APRs offered and what size loan you might get.  It shows a table with scores from a 620 score up to an 850 score and the average APR offered for each.  In Florida right now there is a  (click here to use the APR tool)

The table to the right is an example of what you will see on their site.  I asked then to show information for Florida on a $200,000 loan – the APRs range from 4.658% if you have an amazing score to 6.256% for a low-end score

Advise

The MyFICO.com website has an entire section for questions and advise.

From what I read it is illegal or at least restricted for them to post advise directly from the group because they create the scoring system and other products, so they opend up a forum where consumers can share information about FICO scores.

It has attracted a lot of attention in the customer service world and after browsing it I am impressed.

Here is a great video from The Credit Learning Center.  It’s almost 5 minutes long, but very worth watching!

Each of the three major credit reporting companies has to give you a free credit report every year if you ask for it. They have set up a central website to handle the requests – visit www.annualcreditreport.com and check on your credit info every year.

• Pay all of your bills on time for at least year. Many companies let you set up automatic payments, which is a great way to make sure you never forget to mail a check!

• Check your credit reports for errors – if you find any get them fixed. Mistakes happen, and you could be paying for someone else’s poor financial management. Also, if there is information more than 7 years old it should be removed already – it is still on your report contact the agency and ask them to take it off your report. Click here for a video about monitoring your credit reports by The Credit Learning Center.

• Credit cards and how you manage them have a huge affect on your credit score. Transferring credit card debt from one card to another could lower your score. Don’t open new credit card accounts because having too much available credit can lower your score. If you have extra accounts that you don’t use consider closing some of them.

• Manage your accounts. Your score will usually be higher if you have a couple different types of credit, but make sure none of them are charged to the limit. If you owe a lot of money on many different accounts it can indicate that you are overextended. However, it’s a good thing if you have a good proportion of balances to total credit limits. Also, the longer you have had your accounts open, the better. If there is an account you are ready to pay off consider keeping it open and using it once in a while rather than closing it when you make your final payment. Avoid finance companies – even if you pay the loan on time, the interest is high and it can be considered a sign of poor credit management.

• Too many credit reports being requested can lower your score, so try to shop for mortgage rates all at once. Multiple inquiries from the same type of lender are counted as one inquiry if they all come in over a short period of time – like a week or two.

• If you have had credit problems like missed payments, judgments, etc., wait 12 months to apply for a mortgage. You’re penalized less for problems that happened over a year ago if you have had a good payment record since then.

• If you think you are a victim of identity theft, or if your purse or wallet has been stolen, you can request the credit agencies to put a “fraud alert” or a security freeze on your account to protect you and your credit history.

Finally, don’t order items for your new home on credit — such as appliances and furniture — until after the loan is approved. The amounts will add to your total debt and you could be surprised on the day of closing to find out you no longer qualify for your loan!

Your credit scores, along with your overall income and debt, are a big factor in determining whether you’ll qualify for a loan and what your loan terms will be. You want to do what you can to improve and maintain your credit score before you apply for a loan.

- Pay all of your bills on time for at least year. Many companies let you set up automatic payments, which is a great way to make sure you never forget to mail a check!

- Check your credit reports for errors – if you find any get them fixed. Mistakes happen, and you could be paying for someone else’s poor financial management. Each of the three major credit reporting companies has to give you a free credit report every year if you ask for it. They have set up a central website to handle the requests – visit www.annualcreditreport.com and check on your credit info every year.

- Credit cards and how you manage them have a huge affect on your credit score. Transferring credit card debt from one card to another could lower your score. Don’t open new credit card accounts because having too much available credit can lower your score. If you have extra accounts that you don’t use consider closing some of them.

- Manage your accounts. Your score will usually be higher if you have a couple different types of credit, but make sure none of them are charged to the limit. If you owe a lot of money on many different accounts it can indicate that you are overextended. However, it’s a good thing if you have a good proportion of balances to total credit limits.

- Also, the longer you have had your accounts open, the better. If there is an account you are ready to pay off consider keeping it open and using it once in a while rather than closing it when you make your final payment.

Last, but not least… Avoid finance companies – even if you pay the loan on time, the interest is high and it can be considered a sign of poor credit management.