EDUCATION
Here are some of the most talked about topics within the credit and wealth environment. Including credit statistics and economic trends.
- According to data from the Federal Trade Commission, about 1 of 5 people have a mistake on their credit report that impacts their credit score. - Experian, Equifax and Trans Union, the three major credit reporting bureaus, surprisingly do not share or in most cases report the same information about consumer profiles. Each entity has its own set of information for each consumer. - There are at least 6 side effects of bad credit:
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Higher interest rates on loans and credit cards
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Difficulty being approved for loans
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Difficulty renting a home or apartment
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Higher insurance premiums
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Increased Security deposits
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Employment opportunities
TIPS
- Budgeting helps to provide a clear picture of where your money goes, which allows you to make informed decisions about how to spend it. It shows how much money goes in and out of your pocket each month, and helps you identify areas where you can save money.
- A high-yield savings account (HYS) offers a higher interest rate than a traditional savings account. The interst rate is known as the annual percentage yield (APY). The higher the APY, the faster your money will grow.
CREDIT SCORE STATS
What is a credit score?
A credit score is a number that represents a person's credit profile. The credit profile is based upon an analysis of the habits or pattern of a person's payment history.
Bottom 10 states with the lowest
credit scores as of 2024
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#50- Mississippi-675
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#49- Louisiana-680
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#48- Alabama-685
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#47- Texas-686
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#46- Georgia-686
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#45- Oklahoma-687
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#44- Arkansas-688
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#43- Nevada-691
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#42- South Carolina-692
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#41- New Mexico-695
Annual Income vs Average Credit Score
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$30, 000 or less = 590 score
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$30, 001 - $49, 999 = 643 score
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$50, 000 - $74, 999 = 737 score
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Mississippi has the lowest score of all 50 states at an average of 675.
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9 out of these states are in the southern sector.
Five categories are considered when calculating a credit score:
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Payment history: This is typically the most important factor. The two factors are late and on time payments made.
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Amounts owed: This is the amount of credit that is owed, compared to the amount available to spend.
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Length of credit history.
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New accounts being open in a short time.
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Credit mix: the types of credit you have.
COMMON QUESTIONS
What is Credit Utilization?
- Credit utilization is the amount of available credit that you are using from the amount that you have avaiable. Typically, 30% usage or less is advised, being that 10% or less is the ideal.
How quickly can I see changes in my credit score?
- Each person's profile is different. It depends on a number of factors and which strategies are used.
How long does a collection stay on my credit report?
- The statue of limitations is typically 7 years from the date of the first delinquency.
Will I be able to get another car after repossession?
- The short answer is typically yes. However, you may face higher interest rates and be required to have a co-signer as a last resort.
What is a charge-off?
- A charge-off is a financial term used by creditors when they consider a debt to be uncollectible, typically due to pro-longed non-payment by the borrower. The creditor can still attempt to collect.
How quickly can I see changes in my credit score?
- Each person's profile is different. It depends on a number of factors and which strategies are used.
How can bad credit be legally repaired?
- It is your right and responsibility to assure the accuracy of the items on your credit report. The *FCRA, *FCBA, *FDCPA afford you the legal right to dispute inaccurate items on your credit reports with the credit bureaus and your individual creditors.
*Fair Credit Reporting Act, *Fair Credit Billing Act, *Fair Debt Collections Practice Act