September 23, 2009
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Lousy Credit Card?, Pt.4
Arm yourself and get started.Here's where we have to start splitting hairs. As you may know, credit card offers are largely based on a person's FICO (Fair Isaac's Corp) Score. The scores range between 350 and 800. Until a year ago, a FICO 650 or above was considered good. All that's changed today as credit card defaults and charge-offs have gotten out of control. Now, the minimum "good score" is 700 to 740. Those lucky ones who get the "pick-of-the-litter" for great credit card deals, however, will need a FICO score of 740 or above (the national average is about 700). You can find yours (for a small fee) by dialing up "myFICO.com" and browsing through the maze of commercials. Just make sure you're not being roped into buying more than you want.
You can also try your luck with questions to your issuing bank of choice. Try to get a feel for what they're looking for before making application. In general, you should limit your applications to one every six months. Each time you approve a "hard inquiry" on your credit report, you FICO score gets bumped a little lower. It may take you more then one inquiry at the onset, however. If you feel like the first denial was the bank's bad and not yours, it may be worth a second stab right away with another bank. Just don't go crazy with multiple attempts.
You can also get three free credit reports on yourself every year (one from each of the three biggies: Equifax, Experian and TransUnion). For your freebee, just dial up " Annualcreditreport.com"; by phone at (877) 322-8228 and request a free written copy. Make sure to specify you're after the freebee (they usually cost).
If you find that you need to raise your FICO score, these are some things to do:
O Pay down your debt. Make sure you don't ever owe more than a third of your credit limit.
O Don't ever be late on a payment. It may be to your stead to always pay a little above your minimums every month for later negations (some counselors don't find value in this – you decide).
O If you have old credit cards still in "good standing", keep them that way. Use them for small purchases every 2 months. Old credit card accounts in good standing provide you with a healthy history report. If you don't use them every few months, you bank may close the account for inactivity.