How your credit score can open and close doors for you

There are many ways to get ahead financially: attend seminars where you cut up your credit cards with hundreds of others, join a financial assistance service that helps you get a home equity loan or refinance your home, or you can transfer debt in one. credit card to another credit card with an introductory rate of 0% (rising to 12% six months later).

The reason these methods don’t work is because we don’t cut our expenses at the same time we implement these strategies. Even if we make more money, unless we cut spending, we will continue to spend more money than we have and incur debt. Manage yourself and your money. Money is like food; we don’t eat only when we are hungry, and we certainly don’t spend only when we need something.

Be careful: debt forgiveness can hurt you. The company that forgives your debt can issue a 1099C, which means the forgiven amount is added to your taxable income.

When there is a will, there is another way:

Your credit score (also called a FICO or Beacon score) will affect the interest rate you can get. Credit scores range from 500 to 850. Where are you on the scale?

What’s in a number?

500 and less – you are in serious trouble

650 to 680, you will probably have a hard time getting credit, and if you do, it will be at higher rates

700+–excellent score

How you got your credit score:

a) Payment history (35% of the score). Make payments on time or early.

b) Amounts you owe (30% of the score)

c) Credit history (15% of the score). The longer you have credit, the higher your score.

d) New credit (10% of the score). New credit cards.

e) Type of credit you have in use. Mortgages, Bloomingdale’s, etc.

There are three reporting services that can give you your score: Equifax.com, Experian.com, and Transunion.com. At least once, do an experiment and ask for a report from all three. They will probably provide a supplemental report each year, per person. You will most likely find reporting inconsistencies, such as missing or incorrect information.

Every time a credit report is run on you, your score is lowered by two or three points. You still want to shop around for a mortgage, but consider using a mortgage broker who runs a report to compare the loan. If you go to five different banks, that can lower your score by 15 points.