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Your Credit Score: How to Improve the 3-Digit Number That Shapes Your Financial Future, Fifth Edition

Name: Your Credit Score: How to Improve the 3-Digit Number That Shapes Your Financial Future, Fifth Edition
Author: Liz Weston
ISBN: 9780134211114

by Liz Weston

October 2015

Intermediate to advanced

240 pages

5h 53m

English

Pearson

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About This eBook
Title Page
Copyright Page
Praise for the Previous Edition of Your Credit Score
Contents
Acknowledgments
About the Author
Introduction
1. Why Your Credit Score Matters
How Your Credit Scores Affect YouWhat It Costs Long Term to Have Poor or Mediocre Credit ScoresHow Credit Scoring Came into BeingHow Credit Use Has Changed over the YearsConsumer’s Fight for Truth About Credit ScoresCredit ControversiesCredit Scoring’s Vulnerability to ErrorsCredit Scoring’s ComplexityCredit Scoring’s Use for Noncredit DecisionsCredit Scoring’s Potential Unfairness
2. How Credit Scoring Works
What Is a Good Score?Your Credit Report: The Building Blocks for Your ScoreHow Your Score Is CalculatedThe Five Most Important FactorsYour Payment HistoryHow Much You OweHow Long You’ve Had CreditYour Last Application for CreditThe Types of Credit You UseYour Credit ScorecardYour Results Might DifferHow Do I Get My Score?What Hurts and for How LongNew Versions of the FICO Score

3. VantageScore—A FICO Rival Emerges
The VantageScore ScaleHow VantageScores Are CalculatedSo Which Is Better?VantageScore’s FutureOther Scores Lenders Use
4. Improving Your Score—The Right Way
Step 1: Start with Your Credit ReportCheck the Identifying InformationCarefully Review the Credit AccountsParse Through Your InquiriesExamine Your Collections and Public RecordsDispute the ErrorsStep 2: Pay Your Bills on TimeHow to Make Sure Your Bills Get Paid on Time, All the TimeStep 3: Pay Down Your DebtYou Need to Reduce What You Owe Rather Than Just Moving Your Balances AroundYou Might Need to Change Your Approach to Paying Off DebtYou Need to Pay Attention to How Much You Charge—Even if You Pay Off Your Balances in Full Every MonthHow to Find Money to Pay Down Your DebtStep 4: Don’t Close Credit Cards or Other Revolving AccountsStep 5: Apply for Credit SparinglyHow to Get a Credit Score if You Don’t Have CreditCredit Scores Without Credit
5. Credit-Scoring Myths
Myth 1: Closing Credit Accounts Will Help Your ScoreMyth 2: You Can Boost Your Score by Asking Your Credit Card Company to Lower Your LimitsMyth 3: You Can Hurt Your Score by Checking Your Own Credit ReportMyth 4: You Can Hurt Your Score by Shopping Around for the Best RatesMyth 5: You Don’t Have to Use Credit to Get a Good Credit ScoreMyth 6: You Have to Pay Interest to Have a Good Credit ScoreMyth 7: Adding a 100-Word Statement to Your File Can Help Your Score if You Have an Unresolved Dispute with a LenderMyth 8: Your Closed Accounts Should Read “Closed by Consumer,” or They Will Hurt Your ScoreMyth 9: Credit Counseling Is Worse Than BankruptcyMyth 10: Bankruptcy Hurts Your Score So Much That It’s Impossible to Get Credit
6. Coping with a Credit Crisis
Step 1: Figure Out How to Free Up Some CashStep 2: Evaluating Your OptionsTask 1: Prioritize Your BillsTask 2: Match Your Resources to Your Bills and DebtsTask 3: Figuring Out a Repayment PlanThe Real Scoop on Credit CounselingDebt Settlement: A Risky OptionShould You File for Bankruptcy?The Effects of Bankruptcy ReformThe Type of Bankruptcy That You File MattersShould You Walk Away from Your Home?Step 3: Choose Your Path and Take ActionOption 1: The Pay-Off PlanOption 2: Credit CounselingOption 3: Debt SettlementOption 4: Bankruptcy
7. Rebuilding Your Score After a Credit Disaster
Part I: Credit Report RepairScrutinize Your Report for Serious ErrorsKnow Your RightsOrganize Your AttackWhat You Need to Know About Unpaid Debts and CollectionsWhat You Need to Know About Statutes of LimitationsShould You Pay Old Debts?“But You’ve Got the Wrong Guy!”Part II: Adding Positive Information to Your FileTry to Get Positive Accounts ReportedBorrow Someone Else’s HistoryGet Some Credit or Charge Cards if You Don’t Have AnyPart III: Use Your Credit WellPay Bills on TimeUse the Credit You HaveKeep Your Balances LowPace YourselfDon’t Commit the Biggest Credit-Repair Mistakes
8. Identity Theft and Your Credit
Options That Might HelpCredit FreezesFACTA RightsChip-and-PIN CardsHow to Reduce Your Exposure to Identity TheftBuy a ShredderGet a Locking MailboxProtect Your Outgoing MailBe Careful with Your Tax ReturnsKeep Your Financial Documents Under Lock and KeyGet Stingy with Your Social Security NumberKnow What’s in Your WalletAsk About Shredding PoliciesDon’t Let Your Debit Card out of Your SightMonitor Your AccountsOpt Out of Credit Card Solicitations, Junk Mail, and TelemarketingBe Cautious About Using Your Smartphone for Financial MattersBe Wary of Telephone Solicitors and Emails Purporting to Be from Financial InstitutionsBe Smarter About Social MediaSafeguard Your Social Security NumberMonitor Your Credit ReportsConsider a Credit FreezeWhat to Do if You’re Already a VictimKeep Good Notes of Every Conversation You Have Regarding the ID TheftContact the Credit Bureaus by Phone and Then with a Follow-Up in WritingContact the Creditors by Phone and Then Follow Up in WritingContact the Police or Local SheriffContact Bank and Checking Verification CompaniesContact the Collection AgenciesGet Legal HelpDon’t Give UpWhat to Do if the Credit Bureau Won’t Budge
9. Emergency! Fixing Your Credit Score Fast
Repairing Your Credit in a Matter of Hours: Rapid RescoringBoosting Your Score in 30 to 60 DaysPay Off Your Credit Cards and Lines of CreditUse Your Credit Cards Extremely LightlyFocus on Correcting the Big Mistakes on Your Credit ReportsUse the Bureaus’ Online Dispute ProcessSee if You Can Get Your Creditors to Report or Update Positive AccountsWhat Typically Doesn’t WorkDisputing Everything in SightCreating a “New” Credit IdentityClosing Troublesome Accounts
10. Insurance and Your Credit Score
History of Using Credit Scores to Price Insurance PremiumsBut What’s the Connection?What Goes into an Insurance ScoreKeeping a Lid on Your Insurance CostsStart Thinking Differently About InsuranceRaise Your DeductiblesDon’t Make Certain Kinds of ClaimsBe a Defensive DriverUse the Right Liability LimitsDrop Collision and Comprehensive on Older CarsShop AroundProtect Your Score
11. Can Bad Credit Cost You a Job?
12. Keeping Your Score Healthy
The Do’s of Credit HealthPay Off Your Credit Card BalancesHave an Emergency FundHave Adequate InsuranceThe Don’ts of Credit HealthDon’t Buy More House Than You Can AffordDon’t Overdose on Student Loan DebtDon’t Let Your Fixed Expenses Eat Up Your IncomeDon’t Raid Your Retirement or Your Home Equity to Pay Off Credit CardsCredit and Divorce: How Your Ex Can Kill Your ScoreGet Your Credit ReportsTake ActionDon’t Be LateDealing with Mortgages, Car Loans, and Other Secured DebtConsider a Fraud Alert or Credit FreezeIn Conclusion: The Three-Year Solution
Index

Content preview from Your Credit Score: How to Improve the 3-Digit Number That Shapes Your Financial Future, Fifth Edition

5. Credit-Scoring Myths

For most of credit scoring’s history, the vast majority of the people involved in lending decisions pretty much had to guess what hurt or helped a score. Creators of scoring formulas didn’t want to reveal much about how the models worked, for fear that competitors would steal their ideas or that consumers would figure out how to beat the system.

Fortunately, today we know a lot more about credit scoring—but not everybody has kept up with the latest intelligence. Some of the worst misinformation comes from self-styled experts who purport to know the inside scoop, but who actually promote outdated or downright false ideas about how credit scoring works. Acting on their bad advice can put your score and your finances at significant ...

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Your Credit Score: How to Improve the 3-Digit Number That Shapes Your Financial Future, Fifth Edition

by Liz Weston

5. Credit-Scoring Myths

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