to many ppl to quote here, so, i'll just tell you the top 10 things of what i know about the credit industry since i've been working in it for almost 9 years now.
1) it's not a good thing to have to many cc's. you should never be more than 75% utillized on any card at any time. being at max or over max severely hinders your credit scores b/c it shows you are 100% utilized.
2)no one needs more than one major credit card. most ppl do tho. just make sure you don't get out of control with them. just b/c you have a card at a store with a limit doesn't mean you have free money to go shopping. this is how ppl get themselves into trouble and then can not qualify for mtg's to buy their first house.
3) you should pull a CB on yourself at minimum once every 6 months. personally on my RB visa i have a membership where they send me an update anytime theres ANY activity on my CB. i did this b/c my purse was stolen a year and a half ago and absolutley everything was in it. i phoned equifax and transunion immediately and put an alert on my CB so that anytime i may apply for credit equifax immediatley requires the credior to call equifax directly b/c i have to answer a bunch of questions to prove its me applying for credit and not some random ###### that stole my f'ing purse.
another reason why you want to do this minimum every 6 months is i can't tell you how many applications i've seen in 8 years where a collection for something shows up and ppl didn't even know they still owed whatever creditor or company.
4)don't apply for credit unless you absolutely need too. to many inquiries from various creditors especially in a short span of a few months severely hurts your credit scores b/c it makes you look like a credit seeker. i have updated ppl's information to see if they qualify for something better only to see that everything is perfect except the inquiries and it took a good 50 points off their credit scores.
5)everything stays on your CB for 7 years from THE LAST DATE REPORTED. just b/c you paid something off in june of 2006 doesn't mean it will fall off in june of 2013. any creditor can choose to continue to report any tradeline for as many years as they want. this means if you've had collections etc...and the collection company decides they want to report it for the next 10 years THEN they stop, it will fall off 7 years after that.
any sort of paid off account will still show as a tradeline on your CB but with a zero balance. the reason everything stays there is to establish a history in order to better adjudicate a credit application for better rates etc...
(again another reason to always pull CB"s on yourself...sometimes balances still report when they really should be ZERO. this is then counted as part of your debt service ratio...in otherwords the amount of money going out compared to what comes in.)
6) CREDIT COUNCILLING IS A FORM OF BANKRUPTCY. no matter what any "debt solutions" or any of the other million credit councilling service companys out there say, it IS a form of bankruptcy. it only stays on your CB for 3 years, but the tradelines involved in said credit councilling stay for 7 years or more, and they are reported in such a way that it is a dead give away that you have been on credit councilling/orderly payment of debts.
7)bankruptcy stays on your CB for 7 years. if you go bankrupt twice, then the first bankruptcy is resurrected and is then on your CB for 14 years.
8)never lie about being bankrupt etc...equifax reports and keeps records of everything. every single time one of my employees brings me an application for approval, one of the first things i look at is, how old is the person, how old is their credit. i see that the person is 40 yrs old, and their date on file to the credit bureau (in otherwords first creditor ever obtained) is 20 yrs ago, yet the oldest creditor on the CB is only 5 yrs ago...i force them to call equifax to confirm there hasn't been a bankruptcy. most times there has been.
9)equifax keeps track (via the creditors that report it) how many times you've been 30/60/90 days late. again, this stays on for 7 yrs.
a tradeline will show 30 days late as soon as you are now due for the previous month. so, it's march, and you still havent' made your feb pmt. you are considered 30 days late and so on. this also means that equifax runs a month behind. so, if you pay something off, it won't reflect a zero balance until the next month. this sometimes will also happen if you paid something off within the last few days of a month, it doesn't have enough time to report zero until the month after that.
10) credit is very slow to heal. if you've had a negative reporting such as collections or judgements or anything like that, you need to NOT apply for any credit for a minimum of 6 months depending on the severity of the negative report. (ex. judgements are far worse than collections. judgements mean someone has sued you and probably garnisheed your wages or placed a writ on your home
where as a collection item is just simply saying, this person didn't pay this...so, pay it but we're not going to go to the extreme of sueing you for what you owe)
also, tid bit on car loans....if you can not afford your car anymore, and you give it back to the creditor, they can still report it as a reposession...its considered a voluntary reposession.
so basically the moral of the story is, pay your bills. if you can't pay, call your creditors. they will help you most of the time. some of them are jerks and wont but most of them will. in this day and age and in a time of economic/credit crisis, most ceditors will pretty much do anything they can to keep your business but also do what they can to minimize losses.
other than this, i know nothing.
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