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Excellent Tips From EquifaxHow Do Lenders Determine Your Loan Rates? Have you ever applied for a loan and received a higher interest rate than you expected? Or have you been turned down for a credit line increase that you thought you would qualify for? Checking your credit report is like changing the oil in your car — you should do it regularly. This ensures you know exactly what's being reported about you. Here's why: Lenders often determine your interest rate for a loan based on your FICO® credit score, which is related to information contained in your credit file. Insurance companies often decide your risk category — which can affect your monthly premiums — based on your credit history. Potential employers may request permission from applicants to perform a credit check; employers often view your credit history as an indication of your fiscal responsibility. Rebuilding your credit is not an overnight process. That's why it's important to begin understanding your credit before you need it. Lenders and creditors want to see your payment habits over a period of time before making a decision about you. Protect your personal information. Don't let a thief "dumpster dive" to get your personal information — tear or shred your charge receipts, bank statements, expired charge cards, and pre-approved credit offers. Promptly remove mail from your mailbox after it's delivered. If you plan to go away, call the Post Office and request a vacation hold on your mail. Knowing what's in your credit report could pay off — literally. When it comes time to apply for a loan, knowing your credit standing could help you secure a better interest rate. And the lower your rate, the more money you'll save over the life of a loan. Information is not shared between the three national credit reporting agencies. Therefore, checking your credit file from one agency does not ensure that the same information is contained in your other two files. When checking your credit files from the three major credit reporting agencies, check for inaccuracies and inconsistencies and dispute them immediately.
Tip of the Month: Speed Up Debt Repayment There are a handful of ways you can speed up your debt repayment. That way, you can allocate more of your income to savings, which benefits you in the long run. Start by creating a plan: how do you intend to pay off your debt? While it's tempting to pay off debts according to interest rate, it's often easier (and more successful) to tackle them in order of size and length of pay-off term. This way, as you pay off each debt, the money used for that monthly payment can be added to the payment toward the next debt. The snowball effect will help you pay off your debts before you know it. Even if your minimum amount due decreases monthly, be sure to pay the same amount you've been paying. It's an easy way to pay down your debt faster and avoid remaining in repayment indefinitely. But the easiest and most important way to get out of debt? Avoid accumulating any more. As soon as all of your debts are repaid, focus all of your energy and extra money toward saving.
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