Amrita Jayakumar, NerdWallet Published 8:00 am CDT, Wednesday, July 24, 2019 This article was first published on NerdWallet.com. The way your credit score works can seem mysterious, with several factors intertwining in complex ways. But following a simple recipe can help you build and maintain a good credit score: Pay everything on time. Use less than 30% of your available credit. Keep an eye on everything else. This formula focuses your energy on the two biggest factors that influence your score: payment history and credit utilization (how much of your limits you use). Those two things account for the majority of your credit score, so managing them closely pays off. The rest — such as the types of credit you have, how often you apply for credit and the loan balances you carry — not only have less impact, they can be harder to influence. Let’s break it down: Pay everything on time This is the big one — paying all your bills (not just … [Read more...] about A Simple ‘Recipe’ for Managing Your Credit Score
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Bev O'Shea, NerdWallet Published 4:00 am CDT, Monday, May 20, 2019 This article was first published on NerdWallet.com. Credit scores are creeping upward for most Americans, according to the latest “State of Credit” report from credit bureau Experian. The average U.S. credit score hit 680 in 2018, up from 675 the year before, the report found. That’s the biggest one-year jump since 2008, but not quite back to the 685 average that year as the Great Recession deepened. The report released Monday looked at a statistically relevant sampling of Experian’s consumer credit database, checking data from the second quarters of 2008, 2017 and 2018. It used the VantageScore credit scoring model, which — like its competitor FICO — ranges from 300 to 850. Consumers’ scores determine whether they can qualify for credit cards and loans, and how much interest they’ll pay if they do. The 2018 data showed: The highest … [Read more...] about Credit Scores Are Rising — Is Yours, Too?
provided by Published 3:00 pm CDT, Thursday, April 25, 2019 MoneyTips Few things get people more fired up than rivalries between states. State lines become battlegrounds over sports, economics, culture ... and credit scores? A credit score comparison may not have the same intensity as a college football game, but we're Americans. We make everything a competition. So, who's number one in high credit scores? According to the latest Experian State of Credit report, Minnesota tops the list with a 709 average on the VantageScore scale (ranging from 300 to 850). The report, released in 2018 using data from 2017, shows strong regional blocks of credit score trends. Nine of the top ten credit score states are located in either the upper Midwest or the Northeast. Behind Minnesota, the top credit scores are Vermont (702), New Hampshire (701), South Dakota (700), Massachusetts (699), North Dakota (697), Wisconsin (696), Iowa (695), Nebraska (695), and Hawaii (693). The ten states … [Read more...] about How Does Your Credit Score Compare To Your Neighbors?
provided by Published 9:00 am CDT, Tuesday, March 26, 2019 MoneyTips Another Use for Your Credit Score You probably know that your credit score affects the interest rates you'll pay for credit cards and loans. Did you know that your credit score could also affect your auto insurance rates? It can in all but three states (California, Massachusetts, and Hawaii). Those three states have banned credit-based insurance scoring – the use of credit scores in determining auto insurance premiums. Rep. Rashida Tlaib (D-MI) would like to make that ban nationwide. Rep. Tlaib is introducing a bill that would prohibit auto insurance companies from using a client's credit history to set rates for premiums. She claims that the practice discriminates against low-income Americans and compounds ethnic and racial discrimination. We Use It Because It Works Insurers use credit-based scoring for one basic reason – it accurately assesses risk. Separate studies from the University … [Read more...] about Proposed Law Stops Auto Insurers Using Credit Scores To Set Rates
Discovering that you accidentally missed a payment due date on a credit card or loan can be an unsettling feeling. Your lender might charge you a late fee for the oversight and even worse, it may negatively affect your credit scores. Here's the good news: Your payment has to be a full 30 days late before a lender can report it to the credit bureaus. Once your payment passes the 30-day late mark, all bets are off and damage to your credit becomes a very real possibility. There's no question that the payment history on your credit reports is important. In FICO brand scoring models, payment history is worth 35 percent of your credit score. Yet a late payment, or any other negative blemish on your credit reports, isn't worth a specific number of points. You won't, for example, automatically lose 15 points from your score when a 30-day late payment is added to your report. (FICO scores range from 300 to 850.) The credit scoring process is more complicated. When it comes to credit scores, … [Read more...] about It pays to be on time: How late payments ruin your credit score, finances