Credit score ranges from 300 to 850. Higher score represents less risk for a lender, hence favorable rates.
National average of score and rates for a loan of 300,000.[as of 5th May, 09]
Score APR Monthly payment
760-850 4.555% $1,530
700-759 4.777% $1,570
680-699 4.954% $1,602
660-679 5.168% $1,641
640-659 5.598% $1,722
620-639 6.144% $1,827
See how much financial responsibility helps with lower payments, effectively helping you in building wealth.
New Immigrants - How can I build my credit: If you are new to US whether from Canada, Europe or Asis you will need to build credit before lenders can offer bigger loans.
- Secure credit cards are a great place to start with.
- If your spouse has a good credit history, add yourself as a registered joint user on a card.
- Departmental credit cards are easier to get, whether it is kohls or Target.
- Get utility services in your name.
- Be responsible from start, pay what you owe and preferably in full for credit cards.
Monitoring credit score and report: If this is that important for a financial well being, everyone should take care of continuously monitoring it for any fraudulent entry or identity theft. The federal Fair Credit Reporting Act (FCRA) requires that U.S. consumers be entitled to a free credit report each year. The government’s goal is to make sure that consumers stay informed, fight identity theft, and get fair treatment.
For free credit report visit www.annualcreditreports.com
There are three commonly used Consumer Credit Reporting Agencies by lenders.
- Equifax
- Experian
- Transunion
If you apply for a car loan or a credit card, any one or more of these agencies will be used by your lender to see your credit worthiness. These credit agencies collect information from parties that have previously extended credit to you, such as a department store or a bank. All new enquiry also go in your credit report.
Some key credit score points:
- Avoid over extending on credit available, this is a potential sign for a lender that you may default.
- Before any big purchase like house or a car, don't apply for new credits in last few months and cut down on credit taken. Try to pay off other debt first, before taking on these massive loans.
- Credit is not bad, using it irresponsibly is.
- Pay bills on time, whether it is utility bill or loan payment.
- Monitor your credit report and dispute if something is not true with the credit reporting bureau.
- Protect your identity, never disclose personal information to others if not required.
1 comments:
Good info...keep it up!
Post a Comment