New Credit Score Rules

The Golden Nest Egg With the current economy and the real estate bubble that has been experienced of late, credit scores are becoming even more important, well, high credit scores that is.

While the credit score cut off for getting the best rates and the best deals on financing used to be around 700 now it is getting higher and in order to qualify for the best rates you will probably need a score of 760. For now, anyway, so long as money is tight and banks are nervous.

And of course, there is all of the conflicting information out there about how to best manage your credit.

It is true that if you open a new account your credit score can take a hit. And if you close an account that you are not using your credit score could also take a hit. Much of it is sort of a “damned if you do and damned if you don’t” so you need to just do your best. If you need a new credit card, get it. If you don’t need it, don’t get it. If you’re not using a card you should probably try to keep it, even though you don’t use it because of the all-important debt to available credit ratio. If you have available credit, keep it available, you don’t have to use it and it may be best if you don’t but if you keep it available your debt to available credit ratio will remain high.

Best advice actually is to pay your bills on time and avoid excessive credit (and if you need credit repair, get it done!).

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2 Responses to "New Credit Score Rules"

  1. Lee Finster says:

    Karen, I have several”collection” accounts on my credit report, but the original debt is over 7 yrs old. Apparently, the original creditor sent it to one collection agency, whi reported the the reporting agency, after 2 or 3 yrs they then sold it to another who reported it for 2 or 3 yrs and so on. Is this some kind of loophole in the law that each “collection” agency can report this debt for 7 yrs thereby allowing a debt to be reported for more than 7 yrs?

  2. Karen says:

    All of the research that I have done has indicated that they can only legally report from the “date of the first delinquency” on the original debt, regardless of how many times the debt has transferred ownership to different collection companies.

    If 7 years has passed since the first delinquency you should be able to get that discrepancy removed from your report.

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