TheCreditMaster — Thu, 10 Dec 2009 21:25:00 +0000

FICO Discloses Effect of Credit Mistakes on Score reports A New Horizon Credit Counseling

Fort Lauderdale, FL (PRWEB) (A New Horizon) December 10, 2009 — For the first time, and with unusual candor, FICO revealed “damage point” data and how exactly credit mistakes affect credit scores. FICO is the company that established credit scoring assigning a three digit number ranging from 300 to 850. These “damage points”, depending on the reason for the credit mistake, can reduce your score by 10 to 240 points. The higher your credit score – The more damage the SAME credit mistake can affect your FICO score. Everyone knows that negative actions associated with your credit cards and loans will affect your credit score.

Common examples that affect your credit score are:

Making late payments can decrease your score between 60 and 110 points
Maxing out your credit card or exhausting your credit limit can decrease your score between 10 and 45 points
Negotiating DEBT SETTLEMENTS with creditors can decrease your score between 45 and 125 points
Filing for bankruptcy can decrease your score between 130 to 240 points

Understanding what affects your credit score is important and how that impacts not only your ability to get credit in the future, but how much you now may pay monthly because it also causes your interest rate to adjust.

In order to avoid situations that negatively affect your FICO credit score you may consider talking with a reputable Credit Counseling Service company. “The circumstances identified by FICO that can damage your credit score; that is, late payments, maxing out your credit limit and choosing Bankruptcy can all be avoided by receiving credit counseling and employing a structured debt management plan. The debt management plan will ensure that you maintain on-time payments of your obligations while you systematically reduce your debt; all of which translates to an improved FICO score” says Steven Stark, Chief Operating Officer and General Counsel at A New Horizon Credit Counseling Services in Fort Lauderdale, Florida.

By enrolling in a debt management program, certified credit counselors ensure that on time monthly payments are maintained on your behalf to all of your creditors. This, in turn, typically will INCREASE your credit score. “If your FICO score improves by using a debt management plan, the money saved because of the higher score can be used to repay your debt that much quicker” added Stark. At the end of the day, it is all about protecting your credit score and not allowing monthly payment s on credit cards or mortgage loans to increase or even worse, losing your ability to get credit. If you have already fallen into financial hardship, it is never too late to start the healing process through a structured debt management program. If you would like more information on how credit counseling may help your FICO score contact Stuart Lieberman who may be reached at (800) 556-1548 Extension 1126. A New Horizon –http://www.anewhorizon.org

Editor’s comments:
This disclosure by FICO again underscores the importance of regularly checking your consumer credit report. Many negative items on your report can be errors and they be costing you hundreds if not thousands of dollars every year in interest payments, fees and missed opportunities.

Apart from enrolling in a debt management program (which, though valuable and necessary, can be a very slow and tedious process) you may also seek to give your credit profile a shot in the the arm by having the experts at Positive-Credit.com add positive credit items to your report.

New Credit Card Bill of Rights Has Some Side Effects

EEEnigma — Fri, 22 May 2009 16:30:00 +0000

At 3pm Eastern today President Obama is expected to sign the credit card “bill of rights,” which is intended to protect cardholders from excessive fees and last-minute contract changes.

But what does this legislation mean for the average credit customer?

Most experts are saying that this new “bill of rights” will prompt banks to severely restrict available credit to avoid risk – some say as much as 90 billion!

Bloomberg.com quoted Andrew Caplin, an Economics professor at New York University, as saying, “The bill may stop various forms of abuse, but it will also stop some various forms of credit. If the economic recovery is going to rely on consumer spending, it will be a long wait.”

Scott Valentin, an analyst at Arlington, Virginia-based FBR Capital Markets Corp. states “You’ll see a reduction in credit available to subprime customers, and even those in the near-prime range where the card companies have a hard time gauging what the risk is.”

Experts say that this new legislation may also encourage banks to raise interest rate levels to the point where new account holders will not be able to afford them; this means that those with less than desirable credit scores may still receive cards, albeit at a heightened disadvantage. The

This new legislation may also open up new markets for predatory lenders – low to moderate income households, first-time borrowers and consumers with poor payment histories may be forced into predatory lending scenarios as traditional credit becomes unavailable.

Solutions:

first-time borrowers and those with poor credit history alike will fall victim to the adverse affects of this legislation. Anything less than a stellar credit score will lead to even higher premiums on credit spending. To be forewarned is to be forearmed – you can take real steps avoid these pitfalls. Quick, effective (and legal) solutions include:

Get yourself a stellar credit profile – more info on new credit profiles here.
A variety of credit enhancement options exist for those who want to beef up their score. These techniques consistently raise FICO scores as much as 200 points in as little as 30 days.

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FICO Discloses Effect of Credit Mistakes on Score reports A New Horizon Credit Counseling

New Credit Card Bill of Rights Has Some Side Effects