Credit scores and personal credit history play a more important role than ever before in being approved or declined by your finance company or bank. Let me review a few questions I’ve had come up with customers in the past few months along with basic information on checking your credit bureau and making sure you get an “Approved” decision next time you apply for financing.
Does an ‘in dispute’ notation on one of your trade lines on your personal credit bureau negatively affect your credit score?
The answer is No. Having an account in dispute does not decrease your credit score or negatively affect your credit. With that being said, that does not mean that some of the banks or financing companies you work with don’t have internal rules and regulations from approving you for additional credit until those disputes are verified or settled.
Do the balances on your revolving and installment accounts affect you the same way?
The answer to this question is also No. Having “maxed out” balances on your credit cards or revolving debt will lower your score based on your total revolving debt availability. It is does affect your score to have high balances on installment loans such as a car, home or personal loan. Credit card balances are discretionary in nature, you decide when to make a charge and for how much, this is obviously not the case with installment loans.
What factors are used to calculate your credit score?
See our blog from October 27, 2009: https://financewithafp.com/blog/?p=80
What is a good credit score?
See our blog titled “A Good Credit Score Isn’t What It Used To Be” from January 7, 2010: https://financewithafp.com/blog/?p=167
Keep in mind you can order your free credit bureau report a minimum of once a year. The official website is www.annualcreditreport.com. The report is free but you must pay if you want to see your credit score. The cost per report is about $8. There can be discrepancies between the three bureaus so it is good to see all three.
If you have old derogatory issues on your credit bureau that you would like to have removed, we can refer you to a company that will help you increase your credit score.
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