Column - August 2020
What You Might Not Know About Credit Scores
The only way to take control of your credit, is to know about how credit scoring works.
In addition to knowing the most important factors considered in scoring, such as paying your bills, it can be helpful to know a few other facts about credit reports and scores.
Negative information on your report lowers your score. It also stays on your report for a set time. For example, late payments appear for seven years from the date you first missed a payment. Paying off a collection account won't immediately remove it from your report. Bankruptcies can remain on your report for seven to ten years, depending on the type of bankruptcy.
Good news: all negative information eventually cycles off your report.
You don't need to carry a monthly credit card balance to build your history. You can pay off your credit card bills every month and positively affect your standing.
Settling accounts for less than the full amount owed can harm your score. Any time you fail to repay a debt as you originally agreed, it negatively affects your credit. The negative impact of settlement is still less than the negative effect of not paying a debt at all or declaring bankruptcy.
A good score opens doors for you. It helps you get better interest rates and terms when you borrow money, and it effects how much you pay for life insurance. Which saves you money! Landlords consider your score, and even telecom companies look at your scores before you lease your next smartphone.
Considering how important scores are to your overall financial well-being, it's wise to do everything you can to ensure yours are as good as possible.
RE Questions? Email: firstname.lastname@example.org call/text to (210) 608-0650.
Gina M. Sohmer, is a veteran, a Graduate of the REALTOR® Institute, a Certified Negotiation Expert, a Seller’s Representative Specialist, an Accredited Buyer’s Representative, a 2020 Winner of the Nextdoor Neighborhood Favorite Award, and a REALTOR® with eXp Realty, LLC.