Article from MyTMMO newsletter
Got the Gazelle Gazette from MyTMMO (My Total Money Makeover) today and I saw an article that I thought might be of interest to some of you.
New Score, Same Game
By now, you've probably heard of the new Vantage credit score that should be available later this year and will compete directly with the FICO score.
The product of the Equifax, Experian and TransUnion credit bureaus, VantageScore is formatted like the grading system you had in school. An A is a good score and an F is bad (which means paying more in interest).
But make no mistake, this is not some breakthrough way to gauge your success in life or money. "It's a new recipe, but the same old ingredients," said Jean Ann Fox, director of consumer protection with the Consumer Federation of America in Washington.
The FICO is made up of a number of factors. It considers your credit history (35% of the score), your level of debt (30%), the length of your credit history (15%), new credit (10%) and credit types (10%).
The credit bureaus have not yet released the composition of the VantageScore system, but say it's composed of your credit performance in the last 24 months. Regardless of its makeup, both scores simply mean, "I love debt so much, I want to get into it and stay there forever." These scores do not mean you are winning with money.
What if you have no debt? Then your score will not be very high and thus indicate you are not doing well. But guess what? If you have no debt, that's the real way to know you're succeeding! The money you bring home is for you to spend, invest and give; not to send to credit card and mortgage companies.
Another myth spread by society is that you need credit (and a credit score) to get a mortgage, which is ludicrous. If you live in your apartment and pay your rent on time or early, you're fine.
When you get a mortgage, go to a lender who offers manual underwriting. Manual underwriting is the process used by a lender to look beyond the FICO score to your unique financial situation. Churchill Mortgage is a great place to get quality manual underwriting for your mortgage and is one of Dave's Endorsed Local Providers.
You don't need to maintain a credit score to succeed in life, but keeping it accurate can help to keep your insurance premiums low and can also help you when getting a new job. You can check your credit for free once a year through the Annual Credit Report. Make sure to do this to prevent identity theft and also to report inaccuracies.
By paying off bills and living debt-free, your credit score will become obsolete. That's a bad thing ... for the creditors!
Source: Kiplinger's Personal Finance
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My TMMO Gazelle Gazette Tuesday, March 28, 2006
My TMMO (main site)
New Score, Same Game
By now, you've probably heard of the new Vantage credit score that should be available later this year and will compete directly with the FICO score.
The product of the Equifax, Experian and TransUnion credit bureaus, VantageScore is formatted like the grading system you had in school. An A is a good score and an F is bad (which means paying more in interest).
But make no mistake, this is not some breakthrough way to gauge your success in life or money. "It's a new recipe, but the same old ingredients," said Jean Ann Fox, director of consumer protection with the Consumer Federation of America in Washington.
The FICO is made up of a number of factors. It considers your credit history (35% of the score), your level of debt (30%), the length of your credit history (15%), new credit (10%) and credit types (10%).
The credit bureaus have not yet released the composition of the VantageScore system, but say it's composed of your credit performance in the last 24 months. Regardless of its makeup, both scores simply mean, "I love debt so much, I want to get into it and stay there forever." These scores do not mean you are winning with money.
What if you have no debt? Then your score will not be very high and thus indicate you are not doing well. But guess what? If you have no debt, that's the real way to know you're succeeding! The money you bring home is for you to spend, invest and give; not to send to credit card and mortgage companies.
Another myth spread by society is that you need credit (and a credit score) to get a mortgage, which is ludicrous. If you live in your apartment and pay your rent on time or early, you're fine.
When you get a mortgage, go to a lender who offers manual underwriting. Manual underwriting is the process used by a lender to look beyond the FICO score to your unique financial situation. Churchill Mortgage is a great place to get quality manual underwriting for your mortgage and is one of Dave's Endorsed Local Providers.
You don't need to maintain a credit score to succeed in life, but keeping it accurate can help to keep your insurance premiums low and can also help you when getting a new job. You can check your credit for free once a year through the Annual Credit Report. Make sure to do this to prevent identity theft and also to report inaccuracies.
By paying off bills and living debt-free, your credit score will become obsolete. That's a bad thing ... for the creditors!
Source: Kiplinger's Personal Finance
--------------------------------------------------------------------------------------
My TMMO Gazelle Gazette Tuesday, March 28, 2006
My TMMO (main site)
posted by Emma at 9:20 PM
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