Insider Secrets To Understanding Your Personal Credit Score!
Secret #1: Banks and Other Financial Institutions Prefer you Have Low Credit Scores.
Financial institutions make more money on people who have what we would consider to be low credit score. Not necessarily a bad credit report just miss any payment and your score can lower as much as 100 points. The lower your score the higher the rates they charge you.
Secret #2: One 30-Day Late Payment Can Lower Your Score by as Much as 100 points!
When you find yourself in a compromised position, or just forget to make one payment, your credit score can drop as much as 100 points. That pristine credit score you had is now ruined.
Secret #3: One Late Payment Can be Far Worse Than Being Habitually Late. One person missed 10 payments and another missed just one, you would easily think, “My goodness, the impact should be cumulative”. And that person, who obviously is demonstrating a pattern, should be the one who’s really beaten up the most; when, in fact, in contrast, people who’ve never missed a payment before will see the greatest negative impact for missing one.
Take a person who has a 780 credit score down to a 680, we just took them from A+ paper financing into an alt-A lending program, and we can justify charging them anywhere from a quarter of a point to a full point more in interest, knowing full well that in 30 years of payment history they’ve only missed one payment in their lives.
The Real Function of the Credit Bureaus:
Secret #4: Credit Bureaus Are in Business to Make Money. Every one of the major credit reporting agencies or credit bureaus; TransUnion, Experian and Equifax, are independent businesses. They are, at their core, the largest list broker services in the nation; which means that they sell consumer information, and not just in the case of credit reports. They sell qualified lists. They’re the largest list brokers in the nation.
Isn’t it amazing that you can call up any one of the 3 credit bureaus and request that documentation? They will sell you that information that qualified list. And nobody whose name is on that list needs to be asked if it’s okay with them, because that’s the business that they’re really in.
A credit report is nothing more than taking the same information they already have on all of us and putting it into a package that we call a credit report, and then selling it.
Secret #5: The Credit Bureaus Are in Business to Make Money! Another way credit bureaus make money and one that most people don’t realize is, they get paid by the creditors. The creditors actually pay to report information.
Not only does it cost them money to compile it, but they also have to purchase the software system that integrates with the credit scoring companies or the credit bureaus themselves, TransUnion, Experian and Equifax, they have to pay for that and they have to pay to report every line that they report on consumers.
Why Banks Do NOT Always Report Your Information to the Credit Bureaus!
Secret #6: How Much can Your Credit Scored Be Lowered Each Time it is Pulled? Every time your credit’s being pulled, whether you know it or not, each time it has the capacity to be lowered by as much as 18 points!
Ask the person who’s pulling your credit the right questions; to determine if you even have a reasonably good shot at the loan would probably be the best way to go.
About The Author: Scott Letourneau is the CEO of Fast Business Credit, Inc. When it comes to securing cash and vendor lines of credit and avoiding costly mistakes his company is the authority. For further assistance regarding the development of business credit go to http://www.FastBusinessCredit.com or call FBC at 1-888-313-6333 or 702-977-5246.