Category Archives: Personal Credit
Hey Financially Savvy Sister
We all know that paying our bills late can damage our credit score. And most of us know that having too much debt is a challenge, too. However, there are some things that seem harmless that can also put a damper on your credit as well.
Here are some surprising things that damage your credit:
- Getting the wrong type of credit. Obtaining your financing from the source of your purchase is generally frowned upon. Furniture stores, car dealerships, and more are common sources of this ‘second class’ credit. They’re viewed as credit for those that don’t have options.
- Your utilization ratio is too high. A significant portion of your credit score is determined by how much of your available credit you’re using. For example, if your credit card has a credit limit of $2,000 and your balance is $500, then you’re utilizing 25% of your credit on that account.
- Hard inquiries. In the world of credit, there are hard inquiries and soft inquiries. Hard inquiries lower your score for a time, while soft inquiries don’t affect it at all.
- Not using any credit. Perhaps you feel that you’re being financially intelligent if you swear off credit altogether. However, even if you keep your credit cards, if you never use them at all, you’re hurting your credit score. You need to have some sort of payment history.
Sign up for The Stiletto Wealth Credit & Debt Assistance Workshop on February 25th!
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Your credit is worth keeping in mind. So many things are more expensive when your credit is poor. In fact, many things are entirely out of reach if you have a low credit score. Remember the surprising things in this article that can damage your credit and make an effort to avoid doing any of them. Your financial future depends on it!
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Amazingly enough, someone’s life can be drastically affected by three numbers. Here’s a look at the consequences they can bring. You should review your personal credit reports at least once per year. If all 3 scores form all 3 credit bureaus (equifax, transunion, experian) are above 720, congratulations! You have excellent credit; stop worrying.
If you’re scores are not above 700, no problem—let’s get to work. Take solace in the fact that the national average score is around 676 according to the Gallup Organization. If you’re scores are below 400, 500, or 600, there’s definitely room for improvement and only one way to go—up!
This Book Credit Restoration for Entrepreneurs will help you get started.
Personal credit scores range from 350 to 850. All three of the credit bureaus—Equifax, Experian, and Transunion—offer FICO credit scores using a complex mathematical formula developed by Fair, Isaac and Company, but they each give the scores a different name: At Equifax, the FICO is known as the Beacon credit score; at TransUnion, it’s called Empirica; and at Experian, it’s called the Experian/Fair, Isaac Risk Model.
Business credit scores range for 0 to 100. The major business credit bureaus are Dun and Bradstreet and Experian Insights. Unlike their counterparts the business scoring system is not complexed. It is quite simply based on payment history. Each credit bureau does however, give the scores a different name. At Dun and Bradstreet the score is called a PayDex and at Experian it is called an Intelliscore. Here is the bottom line in this crash course: Good business credit scores PLUS good business credit scores gets you access to lots of business funding!