Moolanomy weekly roundup #3: “My Credit Score” edition
By Pinyo • Aug 12th, 2007 • Category: Weekly RoundupsI was going to do a saving money for college roundup this week in preparation for my first baby. But, with so many cool credit related posts around, the saving money for college will have to wait another week. This should not be a problem since my baby is not due until mid-December (I still have time right?). This edition is dedicate to a person whom I truly love, but still think the best way to get a better credit score is to own a lot of money and respond to every pre-approved letter.
The Simple Dollar wrote Personal Finance 101: Building Up Credit. This is a good primer for those who are new to FICO score. Trent covers the 5 primary components of the FICO score: payment history (35%), amounts owed (30%), length of credit history (15%), new credit (10%), and types of credit used (10%).
Journey To Financial Freedom wrote How FICO score affect your Journey to Achieve Financial Freedom. The post covers the basics. Notables are the table that explains what your FICO score means and 6 ways to improve your FICO score. Basically, pay on time, keep balance low, do not open a lot of new accounts, do not open to many accounts, pay of your debt, and manage your credit cards properly. Very nice post.
Why should you care?
Five Cent Nickel wrote Five Reasons you Should Care About your Credit (FICO) Score. Your credit score is important for many reasons. Having a good score gives you the privilege to enjoy certain services at a better term than someone with a bad score does. So check out these 5 reasons.
Advanced Personal Finance wrote What Does Credit History Really Say? It is interesting how people are using credit score more and more to judge you in a non-traditional way, similar to what Five Cent Nickel discussed.
The Sun’s Financial Diary wrote Credit Score and Insurance Rate. Yet another example of how your score are being used the way it never has been. Kind of scary isn’t it?
Now the fun and juicy stuff…
Blogging Away Debt wrote A Few Words About Identity Theft and Some Resources. Guard your social security number with your life and shred everything! Here are some very useful tips: shred all documents with personal information, stop credit card applications from arriving in your mailbox, ask credit card companies to stop sending convenience checks, hang up on telemarketers that ask for personal information, check your statements diligently, and order your credit report at least once a year. For free credit report, go to AnnualCreditReport.com.
Grad Money Matters wrote Campaign Against Financial Myths: Part 5 - Credit Cards & Credit Score. The post offers 15 myths. The two I love the most are “I need to carry a balance on my credit card to build credit history” and “I only need to pay the minimum payments each month.” Awesome post, well researched and written!
Consumerist wrote Consumerist’s 10 Commandments of Credit. This is another fun list about credit score, credit card usage, and a brief discussion about good debt vs. bad debt — i.e., “Thou shalt avoid interest on consumer debt. Thou shalt try to pay interest ONLY on student loans, mortgages, and car loans.”
But you should not be afraid of credit cards…
Get Rich Slowly wrote How Those Evil Credit Cards Can Be Good for You. According to Justin: “Used properly, credit cards can offer you some real benefits…(1) convenience… (2) protection… [3] rewards, [and 4] free short-term loan.” Amen, I always pay off my credit cards each month and really enjoy the cashback rewards.
That’s for the mention
My credit went in the tank several years when I was in hospital and unable to work for an extended period. My score is in the tank and I can’t get it out of the tank on my min wage income because I have two adverse items that will stay on my report indefinitely.
Sun - no problem!
Minimum Wage - sorry to hear. What sort of things would stay on your record permanently?
A tax lien (which I got by honestly reporting income which would have otherwise been unreported, which generated a tax liability including self-employment tax, although I wasn’t able to actually pay the tax. Tax liens stay on your credit report indefinitely (until they’re resolved plus 10 years); I’ve had mine 25 years.
Also a creditor judgment which lasts seven years but can be renewed.
What have I learned? Better to NOT report income if you can get away with it, if you can’t pay the tax. You can always report the income and pay the tax down the road when you have the money, and the worst that can happen if you don’t (if your income and tax are low) is the IRS catches up with you and slaps on a tax lien. Why unnecessarily volunteer to destroy your credit if you don’t have to?
I did some search and found information about tax lien and credit score on Google Answers. From this, it seems that tax lien do come off after 7 years (I read some where else bankruptcy takes 10 years. But both will really hurt your credit score.
Is there anything that you can do to get these two items off?
Tax liens USED TO be valid for seven years, and could be renewed twice. But some time in the ’90s, Congress changed that, and the credit reporting agencies (CRAs) also changed their reporting. My tax lien was renewed in ‘92 and is still on my credit report. My creditor judgment is almost seven years old and will probably be renewed. Actually, a debt collector has bought that debt and I am making payments on it.
Problem is, it’s hard to get out of debt on a minimum wage income.
I checked out Google Answers and found some outdated information. Someone posted that a tax lien comes off your credit report seven years AFTER PAID. I can believe that. Someone else said that IRS liens (which are filed at the county courthouse) remain on file at the courthouse for 10 years. A link was provided to a page that no longer exists.
My tax lien was renewed in 1992 and is still on my credit report, so that 10 year bit might be wrong.
Minimum Wage, you seems to know a lot about credit issues. May be you can start blogging to get some side income? I am sorry I can’t help.
There are a few items I call “credit report killers” that your clients should be aware of that can adversely affect their credit report and credit scores.
There really isn’t too much room here to explain in detail but I have actually made a video about the top 10 credit report killers. This video was made form the .PDF version which I wrote.
In this video I answer the most common questions I get about information that appears on credit reports.
Specifically I cover information on Charge-offs, Collection Accounts, Judgments, Inquiries, Bankruptcies, Delinquencies, and more…
In the video your clients will learn what each of these items are and how they can affect their credit report, as well as how long each item can remain on your credit report.
The video is very informative and is solid content for your readers and clients.
The Video is Free to Watch HereThe .PDF version you can download here Free
Sincerely
Credit Expert Frank Bruno
link to DisputeDemon.com[edited by moderator -- reasons: commercial link and signature link not allowed]
Frank - welcome to Moolanomy and thank you for your comment.
I read the PDF file and it is very informative. There are certainly a lot of information about credit score there.
By the way, I consider blog visitors my “readers” not “client,” because I am not a professional and I do not provide any fee-based services to them.
I appreciate the info. Sometimes it can be hard to wade through all the BS in the financial searches.
Frank, I like the PDF.