Credit Scores – Terry Hastings
If you’re thinking about divorce, or plan to make a purchase in the future, start watching your credit now. You can go on www.myfico.com and sign-up to get notifications and monthly reports. Make sure that everything on your report is yours. You may still be on your ex’s card, or not even know you are. Scrub your account by getting off all cards you share.
Credit is affected by many things but it can be anywhere from 400-850 on FICO. 740+ is the gold standard. Three bureaus monitor and report credit: Transunion, Equifax and Experion. Each will appoint a score to you that is your “risk brand”. If you are just one day late with a credit card payment, you can lose 40-50 points on your overall credit score. You can also lose points for carrying a high balance even if you do pay it off diligently; 20-25% is optimal. So, on a card with a $10,000 limit, you want to charge no more than $2500 monthly.
It’s also fairly common to find that you’ve relied on your spouse’s credit and now need to establish your own. There are a couple ways to establish credit quickly: You can get pre-paid credit cards. You can also go on a family members card as a “co-buyer”. That history then transfers to you and give you all of that person’s history. Just make sure they add you to a card with a low balance that they pay regularly and have good credit.
If you’re afraid that checking your score will cause it to go down, don’t be. If YOU pull your score, you’re safe. If a bank or institution pulls it, that’s a different story. That tells the algorithm you’re getting ready to borrow money, and it does lower your score.
Credit goes down quickly but takes a long time to come back up. We sound like a commercial for mycreditreport.com.