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What’s NOT Included in your Credit Score

What’s NOT Included in your Credit Score

When you’re preparing for a big purchase, you might start worrying about your credit score and what could bring it down. There are quite a few factors that go into calculating your credit score, but some of the omitted factors may surprise you. Here is what you can expect to be considered when calculating your credit score, and also what’s NOT considered. Your Credit Score There are five main components that make up your credit score. These include:    Your current debt, whether it’s from credit cards, auto loans, or student loans.    Your payment history and whether you’ve consistently made or missed those payments.    What types of credit you utilize. The type of loan will be listed and is important, because some types aren’t actively being repaid, such as student loans.    The length of your credit history, because a very high score from someone who hasn’t had a credit card for more than a few months does not reflect their ability to responsibly handle debt.    New forms of credit you’ve opened, because recently opening a bunch of credit cards or personal loans is a bad reflection of your financial responsibility if you’re applying for a mortgage or other large loan. What’s NOT Considered Now that you know what factors definitively make up your credit score, here are some factors that do not go into calculating your credit score, and some might surprise you.      Your income. Although the lender of a loan will ask what your income is, it is not used to calculate your credit score.    Interest rates. Although these are often determined by your...
The Road to Homeownership: Establishing Good Credit

The Road to Homeownership: Establishing Good Credit

If you’re sick of renting and are ready to put those monthly payments toward your own investment, then purchasing a home of your own may be in your near future. However, it’s not as easy as walking into the bank, applying for a loan, and being handed the keys. Why Credit Matters Usually the purchase of a home requires that you make a down payment equaling a certain percentage of the cost of the home. The amount you are required to put down often depends on several factors, including your credit score. In addition to the down payment, your credit score could affect your interest rate and whether or not you’re approved for a mortgage loan at all. It’s important that your credit is in tip-top shape before you apply for a home loan and begin the process of purchasing your home. Review Your Current Credit Report The first thing you must do is review your credit report and assess your current situation. You are entitled to a free copy of your credit report every year from the three credit bureaus. Look it over thoroughly and make a note of anything that seems out of place. Incorrect information is not uncommon on credit reports, and you don’t want any misreporting to bring your credit down. Fortunately, you can dispute anything you think is incorrect and have it removed, and this will improve your credit score immediately. Ask For the Removal of Small Mistakes While reviewing your credit report, pay special attention to the “adverse accounts” section to see what may be bringing your score down that is within your control. If...
China’s Orwellian Citizen Score System: Is this the Future of Credit Scores in the US?

China’s Orwellian Citizen Score System: Is this the Future of Credit Scores in the US?

Did you recently buy a new video game?   Did you post a negative political sentiment on social media? Do you have a particularly outspoken friend on Facebook who posts anti-government sentiments?  If you live in China and answered “yes” to any or all of the above statements, your credit would’ve been dinged several times. It’s true. China has implemented a new Citizen Score system influenced not just by financial decisions, but lifestyle decisions as well. Using big data obtained from the government and big internet companies, an individual’s Citizen Score is calculated using an algorithm to determine even the most casual of relationships between lifestyle choices and using that data to present or take away opportunities. The scores range from 350-950, with rewards given to those with higher scores.  For example, a citizen’s score of 650 would allow the citizen to purchase a car without a down payment. The higher the score, the greater the rewards. Some jobs even require a high citizen’s score. Is Big Brother Watching You? If this sounds like something straight out of a George Orwell book, you’re not too far off. This level of control the Chinese government is trying to establish may seem far-fetched, especially for those in the U.S. However, with the increasing reports of privacy invasion and financial turmoil in the USA, it might not be too long before the credit system in the United States is revamped to include more “comprehensive” criteria in order to better screen loan applicants or those requesting credit. Of course this is all speculation and would represent a huge invasion of privacy. We don’t have...
How to Protect Your Credit During Tax Filing Season

How to Protect Your Credit During Tax Filing Season

The beginning of every year can be a stressful time for those who are not comfortable with filing their taxes, or who know they owe a significant amount in taxes. Unfortunately, there are criminals who take advantage of this stress and fear by exploiting individuals during tax season to con them into sending them money or personal information. To protect yourself, your credit, and your identity this tax season educate yourself in tactics scammers use and learn how to protect yourself in the event that you are targeted. Common Tax Scam Tactics Scammers will make unsolicited phone calls impersonating an IRS agent demanding that you make a payment. You will know this phone call is fake and not from the IRS if: The caller demands you pay immediately, especially if you haven’t received a bill or any other correspondence in the mail You are not offered a chance to appeal the amount they request They only accept specific payment methods, such as a wire transfer or prepaid debit card You are threatened with arrest, deportation, or losing your license You are asked to provide your debit or credit card numbers over the phone The IRS will never do any of the above things, so even if the caller-ID says “Internal Revenue Service” or something related, be leery of the caller and their intentions. You may also get fraudulent emails claiming to be the IRS demanding payment, so it’s important that you are vigilant about protecting your personal information and know how to react if you are victimized. If you receive a call from a suspected scammer Almost a million people...
Three Credit Card Scams You Should Know About

Three Credit Card Scams You Should Know About

While you may be working hard to repair your credit, there are people out there working hard to thwart your efforts by stealing your information.  And even though security measures are always being improved to protect you against scammers, they are always trying to find ways around the walls. To keep yourself and your money safe, stay in the know about the current scams so you can take measures to protect yourself. Here are three common ones you may not know about. 1.     Fraudulent EMV Card Information Requests If you haven’t heard, in 2016 all credit and debit cards are being replaced with cards that have an EMV chip, which adds an extra layer of security to your card. The new cards are slowly being sent out to replace your current cards. Ironically, scammers are taking advantage of the slow-paced release of the new EMV credit cards. They are sending out emails posing as credit card companies notifying individuals that their new credit card is ready, but they must verify their personal information before it is sent. To avoid being a victim of this scam, know that your credit card company and financial institution will never use email as its first method of contact to verify your information. If you are unsure of whether an email from your financial institution or credit card company is legitimate, call the number on the back of your card to find out. 2.     Mobile Wallet Thieves With the new chip-embedded cards preventing the unauthorized use of your card in a physical setting, scammers are taking advantage of the widespread adoption of mobile wallets...
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