Your Credit Score More Things to Watch
Fact the average person who deals with credit knows what things can hurt their credit score. It is understood that if you are late on your payments this can have a bad affect on you credit rating. This is a fact that the average consumer can deal with.
But now there is something else that can attack your credit score with some devastating results. More and more local and state agencies are using private collection firms to collect unpaid debts. These debts can be a traffic ticket or fine, tax payments that are outstanding or even overdue book from the public library.
Forgetting to pay that parking ticket could cause a collection notice coming to your mail. Understand that most lenders use your credit score as a gauge to determine if you are credit worthy. So ask yourself can something as small as an unpaid ticket be an accurate test to know if you are creditworthy?
How much weight this has on your credit report no one can be sure. But rest assured that once a private collection firm has the bill for collection it is quickly reported to the credit bureaus. That being said it will show up on your credit report as a collection, which in turn can drives down your credit score.
The affect to the average consumer can be drastic to say the least. Since most lenders use your credit score as factor on whether to loan you money or not. Two ways this can affect a consumer is, they deny you credit or they could charge you more for the money you do borrow in the way of more interest.
Remember that a collection can remain on your credit report for seven years. Now this may not be a problem if you have strong credit score. But a weak credit rating can suffer a lot and can cause you some headaches.
It is rumored that the Fair Isaac Corporation or FICO as it is commonly known, is researching whether this is a good indicator on whether or not you pay your bills on time. How that research will turn out is anyone guess. Hopefully the lenders will not use this type of information to determine whether you are good credit risk or not.
Remember you have to be always vigilant when it comes to your credit score. As far as the lenders are concern the current system as it is now is okay with them. The best thing that you can do is keep paying your bills on time and the most important thing is watch those traffic tickets.
Kevin Peterson has been a tax consultant for more than twenty five years. He has recently in the last five years added credit repair to his service and has helped numerous clients improve their credit rating. Learn valuable information on how to rebuild your credit in time for a home mortgage herehow to rebuild your credit in time for a home mortgage here.
Tags: repair your credit score, Bad Credit, credit, debt, rebuild credit, credit score FICO score, how to rebuild your creditFiled under Bad Credit by 
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Mitch Wakem should be a pretty popular author these days, although he may have a reluctant audience. His book, How to Get Credit After Filing Bankruptcy, is a survival guide for one of the most traumatizing life events a person is likely to experience.
And with the economy still in the tank, personal bankruptcy filings are expected to proliferate for some time. Personal bankruptcy filings in August 2008 numbered 934,009 for the previous 12-month period, according to a CNN report, up nearly 30 percent over the previous year. A July 24 (2009) Wall Street Journal article projected that personal bankruptcies could surpass 1.4 million in 2009.
Wakem starts with the basics, explaining the purpose of bankruptcy and how people who file for bankruptcy protection essentially turn over their finances to the court until the matter is settled. He clearly spells out the differences between Chapter 7 (liquidation) bankruptcy and Chapter 13 (reorganization) bankruptcy, the two most common forms of personal bankruptcy. Chapter 7 is the more complete bankruptcy and, especially since the enactment of a 2005 law, much harder to qualify for.
He includes answers to a wide-ranging list of FAQs about bankruptcy, including how long your credit rating will be damaged and to what extent (Answer: It depends). And he dispels a few myths along the way.
In Part 2, Wakem lays out how to rebuild your credit after bankruptcy and how to avoid repeating mistakes that might have gotten you in trouble to begin with. He also offers advice on dealing with credit counselors and equity-based debt-consolidation loans, among other things.
Wakem takes a complicated subject and makes it understandable, which is no small feat. He doesn’t tout bankruptcy as a cure-all for what ails you, and warns that the stress could take a toll on you and your marriage or other relationships.
“Bankruptcy should be looked at as a new beginning to gaining financial control of your life, but it is not a magic formula that will erase all your financial obligations,” he writes.
But for people terrified by the thought of entering bankruptcy, Wakem removes some of the fear and mystery. How to Get Credit After Filing Bankruptcy: The Complete Guide to Getting and Keeping Your Credit Under Control was published two years ago, but it’s more timely now than ever.
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