Get Out of Debt! Book One: Dealing with Challenges of Debt by David Rye & Marcia Rye

Author:David Rye & Marcia Rye
Language: eng
Format: epub
Tags: Personal Finance, Business and Economics
Publisher: An imprint of Adams Media, Inc.
Published: 2009-07-15T00:00:00+00:00

#42. Should I avoid the get-out-of-debt schemes that come my way?

Yes. The fees for get-out-of-debt loans are typically outrageous, and the loans usually just stretch out your payments, costing you much more than if you had paid off the original debt. The get-out-of-debt companies are riddled with fraud and phony come-ons that are designed to part you from whatever money you have left.

Chapter 5

CHECKING YOUR

CREDIT SCORE

Unfortunately, debt has become the high-octane fuel that powers our economy and funds the lifestyle of many individuals. The advent of consumer credit and the resulting debt has created a system for creating and maintaining a credit score on every debtor in the country. The more you know about your own score and how it’s maintained, the better off you will be to make sure it is used in your best interest.

#43. Exactly what is a credit score, and how is it used?

Most loans are based on your credit score, which is a three-digit number that lenders use to help determine your creditworthiness. Credit score is a snapshot of your credit history at any moment in time that indicates to lenders the likelihood you will default on your loan payments. The most common score is known as the Fair Isaac Corporation, or FICO, score that ranges from a low score of 560 points to a high of 800 points. The higher your score, the better will be the interest rates and terms you’ll get on a loan.

Your credit score is used by the lender to determine how much he is willing to lend you and what interest rate he will charge. Obviously, if your credit score is below his minimum score, he won’t lend you anything. Your credit score can also affect the rates you’ll have to pay for homeowners and auto insurance. It can also affect whether or not you’ll get hired for a particular job (for example, a money-handling position). The bottom line is that your credit score is a powerful piece of information that can work for or against you, so manage it well.

#44. Who do I contact to find out what my credit score is?

The three major credit bureaus to contact for your report are:

Equifax Information Service Center, P.O. Box 740241, Atlanta, GA 30374 (800-686-1111 or www.equifax.com ) Experian Consumer Assistance (formerly TRW), P.O.

Box 2104, Allen, TX 75013 (800-397-3742 or www.experian.com ) Trans Union Corp., Consumer Disclosure Center, P.O.

Box 390, Springfield, PA 19064 (800-916-8800 or www.transunion.com )

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