Posts

What credit score is used when applying for a home loan?

, , ,


What credit score is used when applying for a home loan?

Posted by Erica Steeves on October 16, 2018


Your Credit Minute Show Notes:

  • 00:00                                   What’s up YouTubers, this is Nick Tsoukales with Key Credit Repair. And today’s credit question of the day is gonna be “Which credit score is used when I am applying for a home loan?” So pretty simple stuff, okay.
  • 00:10                                   So let’s say for example we have a 750 credit score for Experian, okay. We have a 732 for Equifax, and then we have a 740 TransUnion, okay. A lot of people are gonna think, well Nick, it’s the middle credit score. Well, it sometimes is the middle credit score, so that’s not entirely incorrect, but in this case, the middle credit score would have been a 732, which is technically the lowest credit score, okay. So it’s definitely not the 732, okay. I mean it’s definitely not the lowest credit score, and it’s definitely not the highest credit score. A home loan um or a mortgage lender is gonna use something called the median credit score, or middle of three values. So in this case, what you’re gonna look at is you’re gonna stack up the three credit scores, okay. And you’re gonna look for middle of three values. So in this case, we have 740. So this is obviously the lowest, this is the highest, and this is the middle of three values.
  • 01:01                                   So again guys, if you’re pulling your credit score, wondering which one is used for a home loan, it’s always gonna be the middle of three values. The credit score that you need for a home loan is always gonna be a FICO score, and the place to get that FICO score, aside from a mortgage lender is gonna be myfico.com.
  • 01:15                                   Guys have a great day.

 





Source link

Debt settlement-Does it hurt your credit score?

, , ,


Debt settlement-Does it hurt your credit score?

Posted by Erica Steeves on October 15, 2018


  • Debt settlement-Does it hurt your credit score?

Your Credit Minute Show Notes:

  • 00:01                                   YouTubers, what’s up? This is Nick Tsoukales with Key Credit Repair. Today we are talking about debt settlements. So the big question that we’re getting asked all the time is debt settlement, de-debt relief. Is it, is it hurting my score? Will it hurt my credit score? So let’s actually break down what a debt relief plan is, what debt settlement is, how it happens, and whether or not it hurts your credit score, okay?
  • 00:23                                   So typically a debt settlement plan, okay, is a plan where you are going to start setting aside a certain amount of money into a special purposes savings account, okay? Now with the savings account, as the money starts building up, okay, that money that-that savings, okay, is gonna start being used to settle each of your debts, okay.
  • 00:50                                   Now what are the major pros with a program like this? Well the first big thing is the savings, okay. Now let’s say you have a ten thousand dollar debt, okay. The debt settlement company typically is gonna negotiate a pretty aggressive settlement with this company, okay. So let’s say we have a debt collector, okay. Um that-that settling company is technically is going to be settling the debt somewhere between four and six thousand dollars, or somewhere between forty and sixty percent, so you have major savings.
  • 01:28                                   Now what is the downside, um with a debt settlement plan? Okay, well really there isn’t. As long as you’re in collections. So let’s say you-you’ve already fallen behind on all of your … uh on all of your accounts, okay? You’ve gone through some hardships and all of these accounts are currently in collection status. Paying the off through a settlement, bringing them to zero is going to help your credit score. It’s a positive thing for your credit, okay. These accounts are already in default.
  • 01:55                                   Now let’s say these accounts are all up to date, and you fall behind, okay. You go ninety, a hundred and twenty days late, to use that at leverage to possibly negotiate a settlement, something like this later on, obviously that’s gonna have a damaging affect on your credit score, okay. Keep in mind guys, we talked about this, thirty five percent of your credit score is payment history. So the second you go ahead and you fall behind on those debts, that thirty five percent is gonna be affected pretty dramatically. We’ve seen clients go from 750 to 550 in one month from falling behind on all of their accounts.
  • 02:32                                   Now if you’re looking to file for bankruptcy, this is an alternative, okay. This is a a great alternative, okay. Also, let’s break down why this can actually happen. Okay? Typically when these debts go ninety to a hundred and twenty days behind, these debts are gonna get sent over to a collection department at a bank, okay. They will start aggressively reaching out to you to try to get you to pay on the debt, okay. Usually you can get something off with each of those accounts, so if it’s a ten thousand dollar debt, maybe you’re gonna get a couple thousand dollars off, okay. But if some additional time passes by, those debts are then gonna get sold, okay. And when they get sold, this is where you can start saving the bucks. Okay.

03:17                                   A ten thousand dollar debt, a credit card, okay, is typically sold to a collection agency for about a thousand bucks, I’m not kidding you. Ten cents on the dollar, okay. Now keep in mind, a lot of these debts never get collected, okay. So they’re usually not gonna give you a thousand dollar settlement. But when you end up paying them back-

  • 03:42                                   Sometimes you don’t.
  • 03:42                                   Five thousand dollars, or fifty percent, okay, it works out for everyone. The collection agency made some money, technically. They’ve made four thousand dollars, okay. They’ve recovered some money from you for all the debts they’re not gonna collect, for all the people that are filing for bankruptcy, you’ve saved a ton of money, um they make some money, everyone is happy. The original creditor up here um they took a write off on the loss, okay. So they took a tax deduction for their loss as well, so it all works out well in the end for everybody.
  • 04:16                                   But again, if you’re up to date on these debts guys, a debt relief program is something you’ve really gotta think about. It should only be deemed as something to avoid bankruptcy, um if the debts are-have already fallen behind, um whether you paid it off in full or settling the debt, it’s a net positive, the account is already in default, it’s already in negative balance, bringing it up to date in any way shape or form can only help you.
  • 04:38                                   Guys this is Nick Tsoukales from Key Credit Repair, thanks for checking out our uh our YouTube channel and our Facebook channel, um everyday we’re producing uh new content regarding credit. If you have any questions that you’d like me to answer, you can email me at info@keycreditrepair.com. Thank you.

 





Source link

Credit Score Range- How do I stack up?

, , ,


Credit Score Range- How do I stack up?

Posted by Erica Steeves on October 12, 2018

Your Credit Minute Show Notes:

  • 00:01                                   Hey, guys. This is Nik Tsoukales with Key Credit Repair. I’m taking you through a quick credit minute talking about the different credit score ranges. So, I’m going to break it down in three different ways for you. Okay.
  • 00:11                                   The first credit score that we have is something called the Vantage score. Vantage score 3.0 or 4.0. Okay. Then, we have your FICO score. Um, typically what you’re seeing online is FICO 8 and FICO 9, and then I’m going to give you an additional FICO score as a bonus round. This has a little house on it, and I’m going to explain in a second why this matters.
  • 00:40                                   So, the first thing we’re going to talk about is the Vantage score. Okay. What is a Vantage score? Where do you get it? Okay. Vantage score is the credit score you’re going to find on creditkarma.com. It’s a free credit score that you can access. Okay. The Vantage score is owned by the three credit agencies. It’s owned by TransUnion, Experian, and Equifax. Okay. Um, it is an educational purposes only credit score. Most banks and lenders don’t use it, but for the purpose of credit repair, monitoring your credit, it’s a really good range.
  • 01:11                                   So, I’m going to actually read off some notes here for you guys and give you the exact break down directly from FICO in terms of where we should be. Okay. So, to me directly from Vantage score. So, you have, okay, let’s see. We’re going to go from 300 to 600, that is considered a poor credit score in their eyes. Okay. Then, you’re going to have 601 to 660, which is considered a fair credit score. Okay. Then, we’re going to go 661 through 780, which they consider good, and then 780 plus, which they consider excellent.
  • 02:04                                   Now, keep in mind, this is for educational purposes only. So, if you’re in these ranges, um, you’re doing pretty good. If you’re in this range, you’re really doing amazing. Okay. Uh, let’s move on to FICO score. Okay.
  • 02:23                                   So, one of the most commonly found FICO scores online for educational purposes only is FICO score 8.0 or 9. Okay. And, their range is going to be fairly similar with a few exceptions. 300 to 579 is going to be what they consider as poor, and then we’re going to say 580 to, let’s see here, 669, and by the way I’m going to show you in a second why I could care less what they say. This is an important part of this. I could care less what these numbers are. 670 through 739 is considered good. 740 plus is considered excellent. Okay. And, by the way, this score caps out at 850.
  • 03:22                                   Now, I could care less what Vantage score says is a good credit score or a bad credit score, and I could care less what FICO score or FICO 8 says is a good or bad credit score. So, we’re going to go ahead and we’re going to throw all of this out. We could care less. What we care about is what we can get with our credit scores, and most of my clients are trying to eventually buy a home, and if you’re buying a home, you’re not using either of those two credit scores. Those are just for educational purposes only.
  • 03:48                                   What we care about is another [inaudible 00:03:53] FICO. We’re going to call this the house FICO score. Okay. So, when you go to get a mortgage, uh, the mortgage lenders going to pull something called a trimerge credit report. Okay. That data- When they pull that data in, they’re going to push it through, uh, the FICO algorithm and issue you a score, okay, but the way the scores presented to you is going to vary between the three bureaus. Okay. So, you could have the exact same data between all three bureaus, and there’s a variation natural algorithm that’s used that’s why no three credit scores are exactly the same. Interesting stuff here.
  • 04:32                                   Experian, they’re using a version two. Okay. Equifax is using- using version five, and TransUnion is using version four. If you’ve ever heard of a Beacon score, guys … Some of your old school bankers will know this. They’ll say, “Hey, what’s your Beacon score?”. Okay. In the old days, your Equifax credit score was called a Beacon score. Now, these credit scores are all from FICO. Okay. These are the scores that matter. This is what the banks and lenders are using.
  • 05:05                                   Now, let’s talk about the ranges. In terms of what is considered good or bad, I mean, it’s kind of arbitrary. What I care about is what I can access with my credit score. Okay. So, I’m going to give you a few numbers to focus on. 640, 680, and 740. Okay. Goal number one, goal number two, and goal number three. Okay. Now, obviously, these scores range from about 300 to 850, but again we could care less about that.
  • 05:35                                   What I care about is this … 640 is a goal number one for the majority of my clients. Why? Because that’s going to allow them to access most, um, FHA back loans. So, essentially, you’re getting a house around 640. Now, there are some banks and lenders that will go lower than that. They’ll go to 600 or even 580, but there’s usually contingencies and more complicating factors that they want to get you that loan, but 640 you’re- you’re in. You’re approved. You’re getting something pending all the other things are- are working out in your favor. Okay.
  • 06:04                                   680 is just about the national average. Okay. I care about that. I want to know that I’m at least average. I don’t want to be below average. Okay. Also, that’s technically the beginning of most conventional findings. Conventional findings means basically what they’re not looking for the Federal Housing Administration, conventional money. Uh, they’re not looking for the Federal Housing Administration to back your mortgage. Okay. So, usually the rates, the fees are going to be lower. Okay. You’re just going straight to the bank. They’re saying, “Hey, you’re- you’re average. You’re making a living. Let’s give you a regular loan”. Okay.
  • 06:42                                   And, then 740. 740 is considered really that crème de la crème at the bank level. When they see a 740 plus at that FICO score, that Beacon 5.0, that FICO two or that version four, that’s a credit score that’s going to get you the lowest interest rates. That’s what you’re going to be able to really competitively shop from one bank to another. That’s when you’re getting the best interest rates on things like credit cards, the zero percent APR offers, zero percent on a Cadillac for 12 months offer, all that good stuff. That’s where you want to be.
  • 07:15                                   So, regardless of what a website is telling you guys. Good, fair, bad, excellent, green light, red light, 10 stars or none, we can care less. What we care about is what is your credit score getting us? Is it getting us a house? If not, then who cares. Guys, this is Nik Tsoukales with Key Credit Repair and this is your credit minute. Have a great day.

 





Source link

Credit Score Range- How do I stack up?

, , ,


Credit Score Range- How do I stack up?

Posted by Erica Steeves on October 12, 2018

Your Credit Minute Show Notes:

  • 00:01                                   Hey, guys. This is Nik Tsoukales with Key Credit Repair. I’m taking you through a quick credit minute talking about the different credit score ranges. So, I’m going to break it down in three different ways for you. Okay.
  • 00:11                                   The first credit score that we have is something called the Vantage score. Vantage score 3.0 or 4.0. Okay. Then, we have your FICO score. Um, typically what you’re seeing online is FICO 8 and FICO 9, and then I’m going to give you an additional FICO score as a bonus round. This has a little house on it, and I’m going to explain in a second why this matters.
  • 00:40                                   So, the first thing we’re going to talk about is the Vantage score. Okay. What is a Vantage score? Where do you get it? Okay. Vantage score is the credit score you’re going to find on creditkarma.com. It’s a free credit score that you can access. Okay. The Vantage score is owned by the three credit agencies. It’s owned by TransUnion, Experian, and Equifax. Okay. Um, it is an educational purposes only credit score. Most banks and lenders don’t use it, but for the purpose of credit repair, monitoring your credit, it’s a really good range.
  • 01:11                                   So, I’m going to actually read off some notes here for you guys and give you the exact break down directly from FICO in terms of where we should be. Okay. So, to me directly from Vantage score. So, you have, okay, let’s see. We’re going to go from 300 to 600, that is considered a poor credit score in their eyes. Okay. Then, you’re going to have 601 to 660, which is considered a fair credit score. Okay. Then, we’re going to go 661 through 780, which they consider good, and then 780 plus, which they consider excellent.
  • 02:04                                   Now, keep in mind, this is for educational purposes only. So, if you’re in these ranges, um, you’re doing pretty good. If you’re in this range, you’re really doing amazing. Okay. Uh, let’s move on to FICO score. Okay.
  • 02:23                                   So, one of the most commonly found FICO scores online for educational purposes only is FICO score 8.0 or 9. Okay. And, their range is going to be fairly similar with a few exceptions. 300 to 579 is going to be what they consider as poor, and then we’re going to say 580 to, let’s see here, 669, and by the way I’m going to show you in a second why I could care less what they say. This is an important part of this. I could care less what these numbers are. 670 through 739 is considered good. 740 plus is considered excellent. Okay. And, by the way, this score caps out at 850.
  • 03:22                                   Now, I could care less what Vantage score says is a good credit score or a bad credit score, and I could care less what FICO score or FICO 8 says is a good or bad credit score. So, we’re going to go ahead and we’re going to throw all of this out. We could care less. What we care about is what we can get with our credit scores, and most of my clients are trying to eventually buy a home, and if you’re buying a home, you’re not using either of those two credit scores. Those are just for educational purposes only.
  • 03:48                                   What we care about is another [inaudible 00:03:53] FICO. We’re going to call this the house FICO score. Okay. So, when you go to get a mortgage, uh, the mortgage lenders going to pull something called a trimerge credit report. Okay. That data- When they pull that data in, they’re going to push it through, uh, the FICO algorithm and issue you a score, okay, but the way the scores presented to you is going to vary between the three bureaus. Okay. So, you could have the exact same data between all three bureaus, and there’s a variation natural algorithm that’s used that’s why no three credit scores are exactly the same. Interesting stuff here.
  • 04:32                                   Experian, they’re using a version two. Okay. Equifax is using- using version five, and TransUnion is using version four. If you’ve ever heard of a Beacon score, guys … Some of your old school bankers will know this. They’ll say, “Hey, what’s your Beacon score?”. Okay. In the old days, your Equifax credit score was called a Beacon score. Now, these credit scores are all from FICO. Okay. These are the scores that matter. This is what the banks and lenders are using.
  • 05:05                                   Now, let’s talk about the ranges. In terms of what is considered good or bad, I mean, it’s kind of arbitrary. What I care about is what I can access with my credit score. Okay. So, I’m going to give you a few numbers to focus on. 640, 680, and 740. Okay. Goal number one, goal number two, and goal number three. Okay. Now, obviously, these scores range from about 300 to 850, but again we could care less about that.
  • 05:35                                   What I care about is this … 640 is a goal number one for the majority of my clients. Why? Because that’s going to allow them to access most, um, FHA back loans. So, essentially, you’re getting a house around 640. Now, there are some banks and lenders that will go lower than that. They’ll go to 600 or even 580, but there’s usually contingencies and more complicating factors that they want to get you that loan, but 640 you’re- you’re in. You’re approved. You’re getting something pending all the other things are- are working out in your favor. Okay.
  • 06:04                                   680 is just about the national average. Okay. I care about that. I want to know that I’m at least average. I don’t want to be below average. Okay. Also, that’s technically the beginning of most conventional findings. Conventional findings means basically what they’re not looking for the Federal Housing Administration, conventional money. Uh, they’re not looking for the Federal Housing Administration to back your mortgage. Okay. So, usually the rates, the fees are going to be lower. Okay. You’re just going straight to the bank. They’re saying, “Hey, you’re- you’re average. You’re making a living. Let’s give you a regular loan”. Okay.
  • 06:42                                   And, then 740. 740 is considered really that crème de la crème at the bank level. When they see a 740 plus at that FICO score, that Beacon 5.0, that FICO two or that version four, that’s a credit score that’s going to get you the lowest interest rates. That’s what you’re going to be able to really competitively shop from one bank to another. That’s when you’re getting the best interest rates on things like credit cards, the zero percent APR offers, zero percent on a Cadillac for 12 months offer, all that good stuff. That’s where you want to be.
  • 07:15                                   So, regardless of what a website is telling you guys. Good, fair, bad, excellent, green light, red light, 10 stars or none, we can care less. What we care about is what is your credit score getting us? Is it getting us a house? If not, then who cares. Guys, this is Nik Tsoukales with Key Credit Repair and this is your credit minute. Have a great day.

 





Source link

Would paying off a collection hurt my credit score?

, , ,


Would paying off a collection hurt my credit score?

Posted by Erica Steeves on October 5, 2018


Your Credit Minute Show Notes:

  • 00:00                                   [inaudible 00:00:00] here with Key Credit Repairs. Today we’re gonna answer a simple question which is, will paying off a collection hurt my credit score? Could paying off a collection hurt my credit score? So paying collections, good or bad? So let’s break it down to a science. The question is not as simple as a yes or no. So it’s gonna depend on a couple of things.
  • 00:20                                   So when you pull up your credit report you’re gonna notice a couple of very particular dates, okay? And there’s a difference between them. Okay? You have the date of last activity, okay? And the date, excuse me, the date last reported, okay? So obviously you do wanna pay things, okay, you wanna make sure you’re up to date on all your bills, but let’s say you’ve had a collection that’s fairly dormant. The account is fairly old, okay? Let’s say it’s three years old at this point, and you notice that the date of last activity on that account is 9 of 2014 and then you see the date last reported is 10 of 2018. So that’s typically a debt that is safe to pay off, okay?
  • 01:24                                   And the reason for that is, number one, the date last reported is fairly current, okay? So paying it off isn’t going to drop your score, okay? It’s not a dormant account, it’s an active account, okay? So the reported date is the last time that the collection agency transmitted a signal into the three bureaus.
  • 01:40                                   So here is the collection agency. And they have sent the signals to Equifax, TransUnion, and Experian updating this account, hence the recent date. We’re actually in October of 2018 right now. Okay. The date of last activity though, 9 of 2014, that’s the last time that any money was transacted on this account. So let’s say you made a payment to this debt collector in September of 2014. That’s what you’re gonna see there, okay?
  • 02:10                                   Now, let’s give you another scenario of when you probably might want to question paying back the account, okay? So let’s say the date of last activity, actually, we’ll keep it the same. Let’s say the date of last activity is September of 2014, okay. But, the date last reported is September of 2015. Now this is where it gets a little funky, okay? ‘Cause right now we have a fairly dormant account. That creditor, that collection agency hasn’t reported the item to the um, to the credit agencies in a while, okay? So the information hasn’t been removed but they’re not actively transmitting a signal to the credit agencies. So, where you typically have this, in that last scenario where they’re transmitting that signal, there’s been none of this since September of 2015, okay?
  • 03:09                                   So this is where you’re gonna question paying off this debt. In some rare cases, okay, and this, by the way, is quite rare. With technology these days these accounts are typically updating on an automatic basis every single month. It’s done through automation, no one’s really thinking about it, no one’s hitting a button, okay? But in some rare cases, where you’re paying off a debt that is this old, you’re waking a sleeping giant, okay? And what happens is that date last reported is brought current, the recent derogatory remark is brought current, and you can actually see your credit score drop.
  • 03:41                                   Um, we typically have a 90 day lockout period on all open collections where we tell our clients just hang tight for 90 days. Don’t do anything. Let’s challenge them, let’s request validation on these accounts, let’s make sure if you-if you are gonna pay something, even if you agree with the original debt that you’re paying back the right person, that they’re legitimate, that they can document that they’re licensed to collect on that debt in your state, so on and so forth, and they can follow all the rules and procedures under the Fair Credit Reporting Act and the Faraday Collections Practices Act to protect you. Um, so kind of a mandatory lockout period of 90 days just to make sure everyone’s doing the right thing and everything’s validated, and then at that point you can go ahead and start paying off the debts.
  • 04:18                                   Um, if you wanna talk about a paid for deletion clause in the uh, when you’re paying off the debt or settling it that’s something we can absolutely assist you with.
  • 04:26                                   Guys, this is Nick Tsoukales with Key Credit Repair. Have yourself a great day.

 





Source link

Why is Credit Karma Vs Everyone have different Score

, , ,


Credit Karma Vs Everyone

Posted by Erica Steeves on October 4, 2018


Your Credit Minute Show Notes:

  • 00:00                                   Hey, what’s up YouTubers, this is Nick Tsoukales with Key Credit Repair. Guys, today we’re going to talk about credit karma. The question I’m getting consistently is, “Why is my Credit Karma credit score, so much different from what the banks and lenders are using?” Everyone’s going after Credit Karma these days online. Every blog is talking about Credit Karma, it’s the free site, everyone’s using it, and we’re going to call this video Credit Karma Versus Everyone. Okay? So let’s break down why your Credit Karma score is different. And there really is a very specific reason why your Credit Karma score would be different than what the banks and lenders are using, and the main reason really is the scoring formula. So keep in mind, you have various different scoring formulas out there. Okay? The one I always talk about is going to be our good friend, Mr. FICO. Okay? The FICO score invented by Fair Isaac Company, that has always been the crème de la crème. That is the scoring formula that every bank and lender is using for pretty much everything.
  • 01:01                                   The latest version of FICO is FICO 9, produced in 2016. Um, it’s a scoring formula that banks and lenders really aren’t using, okay. Most mortgage lenders, for you guys trying a home loan are using FICO 4, FICO 5. It’s an older version, it’s got to be a good 20 years old. Uh, but FICO is what the banks and lenders are using. Okay? Now, and then obviously they have you know, FICO 8 and FICO 9, those are for educational purposes only. Keep in mind, there are a good five or six different recent versions of FICO that are used for different purposes as well, there’s the car lending score, the auto lending score, so on and so forth. But we’ve covered that before. Okay? Um, Credit Karma is not using FICO guys, it’s using something called Vantage. So your VantageScore, excuse my bad handwriting, so you’re wondering, what is the VantageScore?
  • 01:55                                   Well, a few years ago, the three, the three credit agencies, you have the big three. Experion, TransUnion and Equifax, okay, they got together and they actually created um, they formed a team and they created this new scoring formula called VantageScore. Okay? The reasons behind it, eh, you’ve got to wonder. I would say probably a big reason if I was in the scoring uh, business, would be to really bypass the licensing fees that they were paying to FICO every time they used FICOs algorithm, because essentially what they’re doing is they’re paying FICO a fee to use that scoring formula. So essentially what it is, they came up with their own formula. Okay? That formula is showing up on all types of websites. The first website that we really show AdvantageScore show up in, show up on, was a website called truecredit.com. For any of you that have been monitoring your credit for more than a decade, you probably remember TrueCredit. TrueCredit was TransUnion’s credit monitoring site and it was super-duper popular and pretty inexpensive. It might even still be up right now, but typically most people are accessing the TransUnion data directly through TransUnion.
  • 02:57                                   Now, when Credit Karma showed up to the party, they were offering a free credit scoring formula. They were doing it in conjunction with TransUnion, so they were offering the VantageScore pretty much automatically. Okay? Uh, they’ve now taken on Equifax as well, Equifax is also using the VantageScore through Credit Karma. Um, the one agency you don’t have on Credit Karma is Experion, which is okay, it is for educational purposes only, but again, there is going to be a difference between that FICO scoring formula and the uh, VantageScore. Okay? The main difference really, and I’m actually going to pull up these stats, is going to be payment history. Okay? So your FICO scoring formula is going to account for payment histories 35% of what makes up the credit score, whereas Credit Karma or VantageScore is going to take it into account as 40%. Okay? FICO score, you’re going to use 30% as a percentage, how they weigh debt, and VantageScore is going to use 21%. So even that is going to be slightly different. Okay? Also you have uh, total balances are broken down to 11%, recent behavior 5% um, and extremely low weight available credit 3%.
  • 04:04                                   So the way they do their algorithm is slight different. It’s not going to be a massive difference in most cases. Uh, VantageScore’s original formula was drastically different from what FICO was using. These days, it’s almost a perfect match. So if you’re using Credit Karma, okay, continue using it. It’s a good little system, it’s free of charge, so I’m a big proponent of free credit monitoring services. It allows you to be in tune with what’s going on in your credit at all times. But if you’re really serious about accessing any sort of financing in the next even six months, I would suggest you move your credit monitoring um, over to a paid site. I’m going to give you a couple of them that are really, really good. Okay?
  • 04:46                                   One of them is going to be myfico.com. Okay? Myfico.com is FICOs actual credit monitoring service. This the theirs guys, okay. It’s not cheap, though. The three-in-one uh, credit monitoring through myfico.com is somewhere in the vicinity of $30, $40, depending on which options you pick, so it is really pricey. But, when you access that report, aside from getting to credit monitoring and the alerts when you pull your credit report each month, you’re getting the data from all three bureaus, and you’re getting all the different versions of the FICO score. You’re getting the mortgage lending score, you’re getting auto lending, credit card borrowing um, all the good stuff, so you can really see the credit report the same way the banks and lenders can see the credit report, okay?
  • 05:33                                   Um, another really good site, and I’ll give you guys a quick link, is going to be smartcredit.com/keycredit. So we’ve been working with SmartCredit, really good credit monitoring site, super awesome tech, [inaudible 00:05:53] app, [inaudible 00:05:55] your credit, and you’re getting real-time alerts. The big benefit with our SmartCredit credit monitoring, is [inaudible 00:06:02] run your credit multiple times throughout the month, and it’s just a little cheaper than myfico, it’s about $25 versus the $39. Okay? So another great resource, keep in mind, we’re not offering FICO scores through this website, okay? We’re offering an educational purposes only credit plus score, where with myfico, you’re getting exactly what the banks and lenders are seeing. Okay guys?
  • 06:22                                   If you have any additional questions regarding Credit Karma versus your FICO scores um, how you should be pulling your credit or preparing your credit scores um, months ahead uh, from getting any mortgage lending, by all means give us a call. There should be, if you’re on Facebook, there should be a learn more button right below my finger here, click on that button, it’ll take you right to our website, you can give us a call and ask any questions. Thanks, guys.

 





Source link

How do paid collections affect my credit score?

, , ,







Source link

Why did my credit score drop even though nothing changed?

, , ,


Why did my credit score drop even though nothing changed?

Posted by Erica Steeves on September 17, 2018


Your Credit Minute Show Notes:

 

  • 00:00                                   Hey what’s up guys, Nik Tsoukales from Key Credit Repair. We are gonna go through the credit question of the day, which is, why did my credit score drop even though nothing changed? Well, I have to tell you, something did change. Uh, just things you might not realize. So the credit report, keep in mind, is constantly changing. The credit score when you’re pulling it up online, or whether a lender is pulling it up, um, is going to pull data or it’s going to be a snapshot of the data in that moment. Now keep in mind from one moment to another things can change. Okay? And let me elaborate a little bit on that, ’cause some of the things you might think of haven’t changed, but I’ll actually break down some of the things that could have.
  • 00:43                                   So, you’re going to notice here, I included a little chart here of what makes up your FICO score. Okay? So at 35 percent which is payment history, we 30 percent is amount owed or debt, 15 percent length of history, 10 percent new credit, and 10 percent credit mixed. So let me give you an example of some things that may have changed that you haven’t realized. Um, first thing is payment history. Okay? You might not have a new lay payment so you’re wondering, Nik why should my credit score change if I don’t have a new lay payment. Well maybe you’ve had a few more positive payments. That could actually cause your credit score to go up. Okay? Um, if you’ve had a recent lay payment obviously the credit score is going to go down. Okay?

 

  • 01:27                                   Amounts owed. This is the big one. I would say this is the biggest culprit. Um, we get people that call us all the time and they will say my credit score has dropped five thousand points, five million points, I don’t know why. I haven’t been late, I haven’t done anything wrong. And in fact they really haven’t done anything wrong, but typically what we’re seeing is this part of the credit score is being affected because of something called, uh, credit card utilization rate. The proportion of your credit card balances compared to your credit limits affect this 30 percent of your credit score.
  • 02:02                                   So let’s say, um, two months ago you pulled up your credit report and it was almost identical with the exception to the fact of, oh, with the exception to the fact that your credit card balance was 100 dollars. Okay? And when we pulled it up this time, the credit card balance was 300 dollars, and that credit limit is, is 500 dollars. Okay? Um, that utilization rate, okay, your proportion of balance compared to credit limit, um, is, has gone up considerably higher. Okay? And that will affect the 30 percent of what makes up your credit score. And obviously if, if that credit card utilization rate has dropped, this part of your credit score will benefit. Okay? So if you’ve pulled up your credit report recently or you’ve pulled up your credit score and there hasn’t been really any adverse change or new negative, uh, uh information, this is the first thing I would check out. Okay? It’s, it’s really the quickest opportunity to grab some points too. Okay?
  • 03:03                                   Um, the next thing is, length of history. Okay, the length of history for your active accounts really affects your credit score in a pretty big way. It’s 15 percent of your credit score. So let’s say you have had a couple accounts that have just dropped off, some older accounts that were closed out a decade ago and they just fell off your credit report because of the statutes of limitations. Well that could adversely affect this part of your credit score as well. Okay?
  • 03:28                                   The other thing is new credit. Let’s say if you’ve got a bunch of new, uh, credit cards recently, um, typically that will, you’ll see a small drop on your credit score. Okay? Um, probably if it just happened, you might see a quick 10 point drop in your credit score, but really over the course of 90, 120 days it should actually help your credit score pretty substantially because you’re gonna start getting on time payments on those cards. Which will positively affect the 35 percent of you credit score that’s payment history. Okay? If they’re credit cards, um, and you keep the balances at zero, it should help your credit score which is amounts owed. Um, because your credit card utilization rate, theoretically, should drop because your proportion of balance to limit has now dropped. Okay?
  • 04:16                                   Um, and then we have credit mix. This is one no one is really talking about. Okay? Let’s actually circle this. The ideal mix is real estate number one. Uh, you have installment credit number two and revolving credit number three. Revolving being things like credit cards, lines of credit, overdraft protection. Installment credit is things like student loans, care loans, car leases, um, personal loans. Okay? And real estate credit being home equity lines of credit and mortgages. Okay? So let’s say your entire credit picture has stayed the same, um, but maybe you don’t have a car loan anymore. Maybe that balance was already down to like your last payment. The last time you checked your credit report recently was closed out. Um, this 10 percent of your credit score could be affected, ’cause you no longer have that perfect mix. You no longer have any installment credit. Um, maybe you have, uh, you know length of history maybe is gonna be a little more adversely affected if that auto loan was 10 years old and it just dropped off. Okay?
  • 05:21                                   Um, so that could have an affect. Amounts owed really shouldn’t have an affect. Um, you could see an adverse affect from payment history, because now you have one less account reporting an on time payment. Okay? So there’s a little bit more than what’s, than what meets the eye with your credit score. There’s a lot that goes into it, but keep in mind the culprits typically are right here. Okay? The culprit is typically right here in amounts owed. So if you’ve seen your credit score drop or there’s been an adverse change, um, obviously if you’ve had a new late it would show up inside of payment history. If you haven’t and all of your accounts are intact, I want you to check your credit card utilization rate. Again, proportion of credit card balances to the available credit limits.
  • 06:04                                   Guys this is Nik Tsoukales with your credit minute. Check us out at keycreditrepair.com for anything credit related. If you have any credit questions you’d like me to answer, uh, I’d be happy to, uh, drum out here on my fancy new little white board. And um, thanks for checking us out guys. Have a great day. Peace.





Source link

How much does a hard inquiry drop my credit score?

, , ,


How much does a hard inquiry drop my credit score?

Posted by Erica Steeves on September 17, 2018


Your Credit Minute Show Notes:

  • 00:01                                   What’s up YouTubers, this is Nik Tsoukalis from Key Credit Repair. Today, I’m going to address something very serious. Something that, for many of you, has made you quite sad. Hard inquiries. Okay? Some of you think this is devastating, this is the end of the world, you know? First, let’s talk about what is a hard inquiry. A hard inquiry is not when you check your credit score online, it’s not when you’re going to Credit Karma, or Privacy Guard, or Smartcredit. com. Anytime you’re checking your credit score for the purpose of credit education, credit monitoring, it does not hurt your credit score. A hard inquiry is a record that’s placed against your credit report when you are checking your credit for the purpose of blending, for being extended credit. Okay?
  • 00:48                                   And the question I get all day long is how much is my credit score going to drop if I have my credit checked? How much, how much, how much, how much, how much? Is my credit going to be destroyed? Is my credit destroyed? I’ve already checked my credit a few times with a few banks, is it over? Am I never going to get approved for something again? And the short answer to that is you are insane. You are insane. Stop listening to this craziness that hard inquiries are destroying your credit. It’s just false, it’s wrong, it’s totally not true.
  • 01:25                                   So let’s elaborate a little bit on this. So I’m going to reference my boys over at myFICO. com. If you’re not sure or not aware who FICO is, it’s Fair Isaac Company. Do you know those guys that invented credit scores? They tell us how inquiries affect your credit score. So I’m going to share this article below in the comments, but in the credit education section of myFICO.com, you can actually search inquiries, and it’s the first question that’s up there, and I’m going to read it off to you guys. Okay? If your FICO scores change, they probably won’t drop much if you apply for several credit cards within a short period of time. Multiple inquiries will appear on your credit report. Looking for new credit can equate with high risk. Okay? But that’s not definitive.
  • 02:16                                   But most credit scores are not affected my multiple inquiries from auto, mortgage, or student loans lenders within a short period of time. The short period of time is not defined. Guys, I’ve been doing this for 15 years, looking at credit reports for a long, long time. I’ve probably looked at, I don’t know, a hundred thousand credit reports, a couple hundred thousand credit reports. It’s almost absurd at this point. I can read these things, I can use ESP to probably tell you what’s on your credit report. I’ve seen so many of these things. The short period of time, I’d probably say 60 to 90 days, okay? If you’re shopping around for something like a mortgage and you want to check out a few different banks and lenders, you want to do a little rate shopping, okay? Keep in mind, to get a proper quote, they need to check your credit score. Don’t be afraid of doing this. It’s not going to hurt your credit score.
  • 03:13                                   FICO has told us, not just in this article but in multiple articles, that rate shopping increase are okay. So those hard inquiries, although they will appear on your credit score or your credit report, they’re not going to drastically drop your credit score. In fact, you may see absolutely zero drop in your credit score. In my experience, I have yet to see a credit report have any adverse effect, or credit score have any adverse effect from a hard inquiry. Guys, over a hundred thousand credit reports easily with my eyes closed, and I have never, ever seen a credit score drop because of a rate shopping inquiry.
  • 03:53                                   Okay, you’re shopping around for a car. Go nuts, go do what you need to do. You’re an educated consumer. Mortgage, go nuts. Shop for five, six banks. You have to. You’re trying to get a good deal. Guys, if you’re getting a mortgage, you’re talking about a 30-year commitment, and you’re worried about your, the hard inquiry affecting your credit score? You’re talking about paying back a bank over 30 years. It could be millions of dollars in interest and you’re worried about the hard inquiry or maybe the 10 bucks you’re going to spend to check your credit report? It’s insane. Same thing with a car. You’re paying back that car loan over the course of 5, 6, 7, sometimes even 10 years, that’s a lot of interest, so you got to make sure you’re getting a good deal.
  • 04:33                                   Um, now, for the first part of this, this answer, um, keep in mind, erratic behavior on your credit report could have an adverse effect. So, um, let’s say you decided to check your credit report a couple times with a credit card company, a couple times with the student loans company, a couple of personal loans, a couple of car loans, five or six mortgages, a few personal loans, and you did this all in one day. Okay? The credit scoring formula is designed to assess risk, okay, to protect future banks and lenders from making a wrong decision in terms of extending you credit, okay? So rightfully so, you could see a drop in your credit score. That’s a red alert. You are now a red alert, okay, maybe you’re a flight risk, maybe you’re about to leave the country forever and ever.
  • 05:25                                   I’ll give you an example. You’re about to leave the country forever and ever, you’re never coming back, and you decide, hey, right before I head out of this place, I’m going to go nuts. I’m going to buy a bunch of stuff, I’m going to get a Macy’s card, a Target card, a Walmart card, a few personal loans, a few car loans. I don’t know what you’re going to do with a car loan. A few lines of credit, and you’re going to go crazy. You could be considered a flight risk, and that’s the only case where you could see a drop in your credit score. And I have to tell you, that is extremely rare. I’ve never seen it before, but that’s what we’ve been told by FICO on numerous occasions.
  • 06:03                                   So guys, hard inquiries, if you’re doing it for the right reasons, don’t be scared of it. Do it, trust your lender. They know what they’re talking about guys, and they’re not going to drop your credit score. Okay? Um, and I’m going to squash one more misconception or one more myth, okay? Or make you guys aware of something. If you’re monitoring your credit score online, you’re on a Credit Karma, you’re on a Privacy Guard, you’re on a ScoreSense, you’re on any of these websites, keep in mind, most of these websites are not using the Fair Isaac Company Scoring method that banks and lenders use, which is typically a, kind of an older version, which is like FICO 4 or FICO 5, okay? These are 20-year-old scoring formulas. They’re using things like VantageScores, um, Credit Plus scores, those scoring formulas are not used by banks or for educational purposes only, but they’re also for marketing purposes.
  • 06:54                                   So they have an incentive to tell you that the world, um, is going to be over because you just had an inquiry. And the incentive they have is when they send you an email saying you just had an inquiry, red alert, login to the website, check the app. They’re going to offer you something. You’re going to login to the app, that’s the bait to get you to login to their app, and when you login to their app, what’s there? There’s a banner for a credit card, there’s a banner for some sort of marketing affiliation they have, there’s a banner for something, and they’re making money on those offers. Because most of these credit reporting companies, what are they? They’re marketing companies, they’re marketing platforms. You get your credit report and score for free, you login, every time you login, they’re marketing something to you. They get your data, they’re reselling it to companies, all this jazz, okay?
  • 07:44                                   So they really, uh, have been pushing this inquiry myth in a big, big way, to get people to login to their websites. Red alert, you’ve had an inquiry, the world is over. Um, new world order is taking over because of inquiries. Login quick, we will save your life. It’s false, it’s a lie, it’s garbage, okay? So guys, in terms of inquiries, that little frown, let’s turn it upside-down. Why don’t we do this together. Okay? Let’s smile. Do your job, do your rate shopping. Guys, this is Nik Tsoukalis with Key Credit Repair. Thank you for checking out our Credit Minute. Subscribe up here, down here, depending if you’re on Facebook or YouTube. Check us out for a free consultation, our staff is standing by, and have an amazing day. See you guys.





Source link

Why did my credit score drop even though nothing changed?

, , ,


Why did my credit score drop even though nothing changed?

Posted by Erica Steeves on September 17, 2018


Your Credit Minute Show Notes:

 

  • 00:00                                   Hey what’s up guys, Nik Tsoukales from Key Credit Repair. We are gonna go through the credit question of the day, which is, why did my credit score drop even though nothing changed? Well, I have to tell you, something did change. Uh, just things you might not realize. So the credit report, keep in mind, is constantly changing. The credit score when you’re pulling it up online, or whether a lender is pulling it up, um, is going to pull data or it’s going to be a snapshot of the data in that moment. Now keep in mind from one moment to another things can change. Okay? And let me elaborate a little bit on that, ’cause some of the things you might think of haven’t changed, but I’ll actually break down some of the things that could have.
  • 00:43                                   So, you’re going to notice here, I included a little chart here of what makes up your FICO score. Okay? So at 35 percent which is payment history, we 30 percent is amount owed or debt, 15 percent length of history, 10 percent new credit, and 10 percent credit mixed. So let me give you an example of some things that may have changed that you haven’t realized. Um, first thing is payment history. Okay? You might not have a new lay payment so you’re wondering, Nik why should my credit score change if I don’t have a new lay payment. Well maybe you’ve had a few more positive payments. That could actually cause your credit score to go up. Okay? Um, if you’ve had a recent lay payment obviously the credit score is going to go down. Okay?

 

  • 01:27                                   Amounts owed. This is the big one. I would say this is the biggest culprit. Um, we get people that call us all the time and they will say my credit score has dropped five thousand points, five million points, I don’t know why. I haven’t been late, I haven’t done anything wrong. And in fact they really haven’t done anything wrong, but typically what we’re seeing is this part of the credit score is being affected because of something called, uh, credit card utilization rate. The proportion of your credit card balances compared to your credit limits affect this 30 percent of your credit score.
  • 02:02                                   So let’s say, um, two months ago you pulled up your credit report and it was almost identical with the exception to the fact of, oh, with the exception to the fact that your credit card balance was 100 dollars. Okay? And when we pulled it up this time, the credit card balance was 300 dollars, and that credit limit is, is 500 dollars. Okay? Um, that utilization rate, okay, your proportion of balance compared to credit limit, um, is, has gone up considerably higher. Okay? And that will affect the 30 percent of what makes up your credit score. And obviously if, if that credit card utilization rate has dropped, this part of your credit score will benefit. Okay? So if you’ve pulled up your credit report recently or you’ve pulled up your credit score and there hasn’t been really any adverse change or new negative, uh, uh information, this is the first thing I would check out. Okay? It’s, it’s really the quickest opportunity to grab some points too. Okay?
  • 03:03                                   Um, the next thing is, length of history. Okay, the length of history for your active accounts really affects your credit score in a pretty big way. It’s 15 percent of your credit score. So let’s say you have had a couple accounts that have just dropped off, some older accounts that were closed out a decade ago and they just fell off your credit report because of the statutes of limitations. Well that could adversely affect this part of your credit score as well. Okay?
  • 03:28                                   The other thing is new credit. Let’s say if you’ve got a bunch of new, uh, credit cards recently, um, typically that will, you’ll see a small drop on your credit score. Okay? Um, probably if it just happened, you might see a quick 10 point drop in your credit score, but really over the course of 90, 120 days it should actually help your credit score pretty substantially because you’re gonna start getting on time payments on those cards. Which will positively affect the 35 percent of you credit score that’s payment history. Okay? If they’re credit cards, um, and you keep the balances at zero, it should help your credit score which is amounts owed. Um, because your credit card utilization rate, theoretically, should drop because your proportion of balance to limit has now dropped. Okay?
  • 04:16                                   Um, and then we have credit mix. This is one no one is really talking about. Okay? Let’s actually circle this. The ideal mix is real estate number one. Uh, you have installment credit number two and revolving credit number three. Revolving being things like credit cards, lines of credit, overdraft protection. Installment credit is things like student loans, care loans, car leases, um, personal loans. Okay? And real estate credit being home equity lines of credit and mortgages. Okay? So let’s say your entire credit picture has stayed the same, um, but maybe you don’t have a car loan anymore. Maybe that balance was already down to like your last payment. The last time you checked your credit report recently was closed out. Um, this 10 percent of your credit score could be affected, ’cause you no longer have that perfect mix. You no longer have any installment credit. Um, maybe you have, uh, you know length of history maybe is gonna be a little more adversely affected if that auto loan was 10 years old and it just dropped off. Okay?
  • 05:21                                   Um, so that could have an affect. Amounts owed really shouldn’t have an affect. Um, you could see an adverse affect from payment history, because now you have one less account reporting an on time payment. Okay? So there’s a little bit more than what’s, than what meets the eye with your credit score. There’s a lot that goes into it, but keep in mind the culprits typically are right here. Okay? The culprit is typically right here in amounts owed. So if you’ve seen your credit score drop or there’s been an adverse change, um, obviously if you’ve had a new late it would show up inside of payment history. If you haven’t and all of your accounts are intact, I want you to check your credit card utilization rate. Again, proportion of credit card balances to the available credit limits.
  • 06:04                                   Guys this is Nik Tsoukales with your credit minute. Check us out at keycreditrepair.com for anything credit related. If you have any credit questions you’d like me to answer, uh, I’d be happy to, uh, drum out here on my fancy new little white board. And um, thanks for checking us out guys. Have a great day. Peace.





Source link