As a certified debt elimination specialist, one of the most common concerns I encounter from my clients is with regards to their individual FICO scores. In this day and age it is not an exaggeration to state that this simple three digit number truly dictates ones financial future so therefore such concern is merited indeed. Lately a common inquiry from these clients is whether I can suggest a good credit score counseling service so that they can be provided with a detailed appraisal of their credit situation. With that information in hand they could then initiate a plan to either maintain a high credit score or improve it if necessary.
The good news is you don't have to hire anyone to accomplish what you can easily do on your own. To illustrate let's examine the case of one such client of mine who we'll refer to as "Sally".
About four years ago "Sally" purchased her first home. Back then she recalls that her three credit scores ranged from around 730 up to 750.
Since that purchase she has not missed or even been tardy on any of her mortgage or credit card payments.
"Sally's" concern stems from the fact that over the past several years she has opened six new credit cards so that she could take advantage of the low introductory interest rates and the other perks that came with them.
Her basic question centered on whether she should close these six relatively new credit card accounts. While how FICO scores are computed is a closely guarded secret, my experience is that opening a new credit card account will result in about a three point debit. While by itself this minor 3-point "ding" is rather insignificant on its own, it should be pointed out that if you open several accounts in a short period of time like "Sally" did, the damage can be multiplied significantly.
However, you can "stop the bleeding" so to speak by handling this new credit responsibly by simply making your payments on time and never using more than 30% of your available credit line. In fact, if you want to repair this "wound" quickly and possibly even improve your score then never exceed 10% of your credit line.
I also insisted to "Sally" that if she truly wanted to perk up her scores she should refuse to accept any more offers to open new accounts, no matter how low the rate or how attractive the incentives. Most importantly I shared with her that she shouldn't close any of the six accounts she was concerned about because doing so would probably do more harm than good.
Most importantly however I shared with "Sally" that if indeed she was using her credit as responsibly as she indicated then she probably has very little if anything to worry about, especially since she wasn't planning on any large purchases such as a new car or a move to a new home anytime soon. But "Sally" admitted that as a teacher she's used to grading others and really wanted to know what her credit score "grade" was so that she could establish a benchmark.
With her goal clearly defined I advised "Sally" that she should ignore all those radio, TV, and Internet advertisements regarding this type of service because it's a well-known industry "secret" that the bureaus themselves provide these services with scores that are, more often than not, nowhere close to the same FICO scores that are used by most lenders.
Therefore, to get the truest perspective of ones standing with the credit bureaus I recommend MyFico.com. To the best of my knowledge, MyFico.com is the only place where you can buy your actual FICO scores from all three major credit bureaus.
Last I looked this service will cost about $50 but along with your scores you'll also receive the three actual credit reports along with "reason codes" that informs you as to what's hurting and helping your scores.
The bottom line is simple: By using your credit responsibly as illustrated above and utilizing the MyFico.com service if you so desire, like "Sally" you'd be able to enjoy the security and peace of mind of knowing exactly where you stand in the eyes of any potential lender.
Bill Walker is the Founder and CEO of Sierra Sunset Enterprises. Based in Burbank, CA he is a certified debt elimination specialist who recently partnered with nine time New York Times bestselling author David Bach, the world's foremost expert in personal finance to promote his newest venture, Automatic Millionaire International (AMI):
http://www.youryieldofdreams.com. AMI offers a product line and affiliate program specifically designed to help you Finish Rich?. With over two decades of experience in home-business entrepreneurism, Bill has often used the educational skills he utilized for 14 years as a classroom teacher, to mentor and train thousands currently running a home business ( or those that are considering such a venture) via seminars, telephone conference calls, and college extension classes. Currently Bill is a passionate advocate of Passive Income Programs (PIPs) which require no selling or recruiting. To learn more about Bill or to contact him directly, visit:
http://www.whoisbillwalker.comBy William C. Walker
http://www.whoisbillwalker.com