Uptrender Blog

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UNDERSTANDING THE STATE OF YOUR CREDIT SCORE

There are approximately 70.2% of American consumers have at least one credit card, and the average person has four credit cards with statistics proving that an estimated 55% of these consumers have debts on them. What’s the reason for all these cards? Well, there are various reasons why they choose to open all these accounts, and these reasons usually circulate around shopping, utility bills, loans, or mortgages depending on what type of credit card they’ve signed up for.

Driven by carelessness and ignorance, oftentimes we overuse these cards and damage our credit scores without us even knowing. Only at that time when you expect to get a smooth loan transaction do you find yourself caught up in a tight situation as brokers tell you “Your credit score is too low sir; we can’t provide you with the loan you asked for.” Doesn’t that sound frustrating? We think so too.

Banks, credit unions, and other financial institutions have records of your credit report, and everything you do with the card you have they’ll be able to track in seconds, which is why you need to use these cards wisely and give constant attention to everything that concerns your credit score. Whether it’s a late payment or bad debt, this takes a toll on your score and it’ll definitely affect plenty of things.

You might be asking how do they know all this? Well, financial institutions will generate a three-digit score known as “credit score” and use this information to predict how likely you are to repay your debts.

Now, by basing on your credit score, financial institutions will usually think that the higher the credit score means the higher the probability of the debt being paid back in full which is why they’ll grant clients with high credit scores for loans and such. The credit scores vary from a low of about 300 to a high of 850 or 900 depending on the score-generating organization. Now that seems understandable, isn’t it?

Here’s a question for you. Did you know that mistakes aren’t limited to clients only? If not, then this will get interesting. You see, mistakes occur from time to time by the credit bureaus due to the number of clients they have to cater which makes them vulnerable to inputting inaccurate information on our credit reports, and by law under the Fair Credit Reporting Act, consumers have the very right to dispute this inaccurate information and get their credit score back in place.

With even this basic information, you can start reviewing your credit report and from there look for reasons to dispute and challenge the inaccurate information you find. You can even seek professional help by connecting with our consultants.

When it comes to our credit reports, no one really teaches us to read it, and often times it gets confusing with all the numbers and code the credit monitoring companies places on our credit report, causing us to give up on disputing the inaccurate information and just paying it forward without challenging it. The good news is we have the right program for you.

Credit Counseling

Uptrend Credit Solutions is a premiere credit counseling organization that guides and provides you with instructions in achieving financial freedom. When severe financial problems get in your way and keep you from getting other personal and economic benefits, Uptrend consultants always tries their best to guide and ensure that you get back on track.

We also offer credit improvement programs, which will be essential to increasing credit score by helping you remove incorrect information that damages your credit and restore your credit profile and recommend products that will help you along the way.

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THE UNPOPULAR OPINION ABOUT CREDIT.

This is an unpopular opinion but Uptrend Credit Solutions will say it anyway…

Most people are focused on their credit score but don’t even pay attention to their credit reports.

Being cautious with your credit score only is like answering an exam without actually reading the questions & then expecting to get a high score.

Or doing a thesis without researching about it

Or cooking food without knowing the ingredients

We bet they don’t even take their time reviewing it..

Because they thought adding cards & paying on time are the only ones affecting their credit score. Not everyone is knowledgeable enough about these things.

And here’s the bitter truth…

There are items that are silently damaging your score without you knowing it.

And for some people, that’s okay as long they reach the score they want. Most of them are too busy.

Well, we honestly don’t see anything wrong with it.

Now, we know this may sound weird coming from an agency offering credit improvement services.

But that’s the thing…

Here at Uptrend Credit Solutions, we can only educate & inform people about inaccuracies on their credit reports & why it needs to be removed, it is still up to a person to decide.

Commanding them to sign up for our services will only look like that we’re doing it for business.

Every person has different situations.

But let’s say ‘commanding’ people DOES work, and we manage to have some people sign up with our services

What’s next?

Do we start assuring other individuals that they will get great results with us just because one person signed up & had great results, even though they have different situations?

Because here’s the thing…

Whether we like to admit it or not, no credit counseling company can assure anyone to remove anything on a credit report.

And I know it’s easy to think that there’s no sense in paying if those companies cannot provide assurance.

Especially when you’re paying monthly & you really need to build credit because you want to achieve something.

I know because the Founder of Solutions was once there.

Heck, he has strived since the pandemic outbreak in building his credit along with his family and friends.

So yes, here in Uptrend Credit Solutions, we do understand.

https://www.uptrendcredit.com/education/828/the-unpopular-opinion-about-credit

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HOW DOES MORTGAGE LENDERS DETERMINE THE QUALIFYING SCORE?

This was developed for Creditors AND lenders to better understand the risks of approving someone’s loan application. The Borrower is then assigned a 3-digit code ranging from 300 to 850. The credit score assigned to a consumer is being calculated based from:

· 35% Payment History · 30% Credit Utilization · 25% Credit History · 10% Credit Mix · 10% New Credit

Understanding how the credit score is being computed not only by mortgage lenders but also by the other creditors would help us understand if we are eligible for a loan or for applying for a new account. The credit score is categorized by FICO into 5 parts. 300-579 being Very Poor, 580-669 being Fair, 670-739 being Good, 740-799 being Very Good, and last but not the least, 800-850 being Exceptional. With this credit rating, you can determine how you are doing in terms of the 5 factors mentioned above. Having late payments more than 30 days in one or more accounts would severely impact your credit rating. The majority of the creditors would always look at your credit scores before handing out approval. They base it on the FICO scores more than the scores being assigned by Vantage. With Vantage, they base their credit score computation on these 5 factors:

· 40% Payment History · 21% Depth of Credit · 20% Credit Utilization · 11% Balances · 5% Recent Credit · 3% Available Credit

The vantage score range is divided up into 5 parts. 300-499 being Very Poor, 500-600 being Poor, 601-660 being Fair, 661-780 being Good, and 781-850 being Excellent. But the difference between the two credit score models and why the other one is more preferred than the other is that FICO scores review not only the general data but also their reviews are very detailed specific in comparison with the Vantage Scores. With this being said, most lenders do prefer to base their review using the FICO score model.

HOW DOES MORTGAGE LENDERS DETERMINE THE QUALIFYING SCORE?

https://www.uptrendcredit.com/education/27933/how-does-mortgage-lenders-determine-the-qualifying-score/

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SOFT INQUIRY VS. HARD INQUIRY – WHAT IT MEANS TO YOUR CREDIT?

It’s important to understand all the elements that comprise your credit score when it comes to establishing a good credit, and credit inquiries are a huge variable. Likewise referred to as a “credit rating check” or a “credit score pull,” a credit inquiry is where an institution requests your credit score report and also scores from any or all of the major credit scores bureaus. Credit inquiries are mostly made by financial institutions, yet they can be carried out by all kinds of entities for various factors, such as the credit record a property manager draws when you obtain a home

For an easier comprehension of what a credit inquiry is and how it influences your rating, think of your overall credit score as a pie. Credit inquiries are one small slice– specifically, 10 percent of the pie– while the rest is composed of your credit card usage rate, percentage of on-time settlements, length of your credit history and any defamatory marks or late repayments on your report.

What is A Soft Inquiry?

Commonly described as a “soft pull,” soft inquiries are the most standard form of a credit check and happen when a person or firm checks your credit score as a component of a history check. For instance, when a credit card provider checks your credit rating without your approval to pre-qualify you for a credit card or any financing deals. A possible employer could also run a soft inquiry before employing you to see your fundamental credit rating.

Some forms of soft credit rating consist of inspecting your very own credit report or making an application for a phone bill or other utility services. In this case, the soft credit check serves as a way to certify you for certain kind of plans or coverages.

How Does Soft Inquiry Impact Your Credit Score?

Soft pulls of your credit score will not affect your credit rating, unlike a hard pull. Among the basic distinctions between these two types of inquiries is that a soft inquiry usually occurs when a person is just checking out your credit report. Nonetheless, a hard inquiry will only happen if you are sending a brand-new application for a credit score, such as a credit card application or perhaps a loan. Soft inquiries are not linked to an application for credit. That’s why they are not regarded as an indicator of high risk, and for that reason don’t impact your credit scores.

You can trigger soft inquiries on your own without hurting your credit report. This is very valuable for somebody who is trying to establish, restore or just enhance their credit score because you can keep an eye on your progression every month without stressing over hard inquiries that are impacting your rating negatively

How Long Do Soft Queries Remain On Your Credit Rating Report?

One good thing about soft queries is that you can see them on your credit reports whenever you check your credit. However, credit bureaus usually exclude soft inquiries on the reports they submit to financial institutions and send them hard inquiries rather.

Since soft inquiries have no impact on your credit history or credit scores, the length of time that it continues to be on your credit report is of no importance. They are only visible when you examine your own record but they aren’t commonly visible to creditors. Therefore, trying to eliminate soft inquiries from your credit report is basically senseless.

What is A Hard Inquiry?

A hard inquiry or a “hard pull” absolutely influences your credit rating, as it is a formal inquiry that enters into your credit record. This suggests that any person (including you) who does a hard inquiry will certainly see it, and because hard pulls impact your credit score, they can only be done with your approval.

This kind of inquiry is activated when you apply for credit, such as a mortgage, credit card, and any other loan types.

Creditors or interested parties conduct a hard inquiry to inspect the history and strength of your credit score as well as to confirm that you have no negative marks on your report, like delayed settlements or charge-offs. Unfavorable marks will likely minimize your possibilities of being approved for a loan as they show that you may not be a responsible borrower.

How Does Hard Inquiry Impact Your Credit Score?

While it is usual for a hard inquiry of your credit to decrease your scores by a few points, it might also have little to no effect on your ratings, depending on the situation. On a positive note, the negative impact of a hard inquiry is only temporary, even if it does decrease your credit score.

More often than not, a single hard pull is not likely to have a significant effect on whether you get approved for a new loan or credit card. However, too many hard inquiries in a short period of time can hurt your credit since lenders view this as a sign that you may be experiencing financial hardships, thus they are more resilient to approve your new credit..

How Long Do Hard Inquiries Remain On Your Debt Report?

Hard inquiries usually remain on your credit reports for around 2 years, but the momentary bad impact of a hard pull is a lot shorter than that. What you ought to actually keep an eye out for is making way too many credit inquiries in a small amount of time.

As an example, you would certainly not want to request a personal loan and car financing simultaneously, even more so within a short period. Aside from the fact that these hard inquiries could draw your credit score down, lending institutions and also credit card issuers will promptly spot this on. Making multiple hard inquiries in a short duration would give them an impression that the borrower is a potential higher-risk client.

Many people always want to know if hard inquiries can be eliminated since they can have an effect on your credit scores as well as remain on credit reports for 2 years. Even though some inquiries can be qualified for removal, the eligibility for removal is rather limited and is typically only applicable for unapproved activity.

The Key Takeaway

Your credit rating is a crucial part of your financial status, so it is essential to recognize all the factors that comprise your score, and credit inquiries are simply among those.

If you’re worried about your credit or if you need some assistance in fixing a low credit rating, Uptrend Credit Solutions can help you repair your credit record and manage your financial wellness.

Schedule Consultation Now