Massachusetts Credit Score Notes
Our clients often ask us about their credit scores before and after bankruptcy. We are compiling a survey of clients following bankruptcy to see what practical tips they can provide. In general it works like ABC:
Annualcreditreport.com: Go to that website which will provide you with information to get free credit reports from the three main credit reporting companies: TransUnion, Equifax and Experian. You can also get your FICO score, named for the Fair Isaac Company, by going to MyFico.com; this only helps if you undertake this exercise regularly to make comparisons.
Blunders revealed: Review the reports carefully, looking for their blunders. There will be directions as to how to correct mistakes. Be prepared to use supporting documentation to correct mistakes.
Credit improvement tips: 35% of your credit score is based on payment history – so pay on time; 30% of your score is based on the amount and type of outstanding debt – so keep your balance low; 15% of your score is based on length of credit history – so don’t close out accounts that have any longevity, aim for long term credit with your creditors; 10% of your score is based on the number of accounts recently opened; finally, 10% of your score is based on the mix of credit cards, motor vehicle secured loans, mortgages, etc.
When applying for credit, remember that the credit score does not reflect all of your financial history or your assets. Your income, your assets, your ability to save for retirement and college are not included. Your regular payments for rent, medial bills and utilities are not necessarily reported.