Debt-Free Forever Gail Vaz-Oxlade (best ereader for epub TXT) 📖

number. While Fair Isaac & Co. and the credit bureaus do not reveal how these scores are computed, there are a number of factors that affect the score you receive.

The “Credit Scoring System” is a numbers game: the more “points” you score, the better you do. People are sometimes surprised at what will negatively affect their scores.

While you may be tempted to lie about your age especially if your boy-toy is looking over your shoulder, don’t. If a creditor catches you in a lie, they aren’t going to trust the rest of the information you provide either, and you won’t get the loan. Of course, vanity isn’t the only reason people lie about their age. If you’re under 21, you might be tempted to lie because you’re afraid they won’t like your tender age. And you’d be right. Under-21s score zero points. Between the ages of 24 to 64 years, give yourself a point. You’re probably working. Over 65? Zero points … you’re old!

GAIL’S TIPS

Whenever you use all the credit you’ve been given on a credit card, the credit scoring agencies shake their heads and say, “Tut-tut” and then adjust your credit score down. And the closer you get to your limit, the more they shake and tut and subtract from your score. When that happens, lenders respond by jacking up your interest rate. Type up the following and stick it to the back of your card: Danger: Your credit limit is $ (half of what your statement says it is) and you have $ (how much) room left!

Creditors think people who are unmarried are a higher risk. If you are married, give yourself one point. Now you’d think that being divorced might work against you (all that spousal and child support), but most creditors don’t give a whit.

No dependents? Score zero. You’re probably still drinking your money away like a teenager since you haven’t yet “settled down.” And with no “ties that bind” you could skip town at a moment’s notice; not good for collections. One to three dependents? Score one point. You’re a solid citizen. More than three dependents? Score zero. Have you no self-control? And don’t you know you that with all those mouths to feed you could get in debt over your head?

GAIL’S TIPS

You don’t automatically assume your partner’s level of indebtedness when you choose to tie the knot. The only way to be on the hook for your partner’s debt is to actually sign up for it. if you don’t co-sign, co-borrow, or in some way put your John Hancock on the paperwork, nobody can collect the debt from you. However, if you have joint assets, his or her share of the assets could be affected when the bill collectors want their money back. They can force the sale of joint assets to get their piece of the pie. So the trick would be to not own anything jointly. And your pal’s crappy credit history could come into play when it comes time to start fulfilling some of your dreams. A lousy history with money may mean you won’t qualify jointly for a mortgage, or you’ll have to pay through the nose.

Home address? Live in a trailer park or with your parents? Oops. Bad risk. Score zero points. You’re showing no stability and could skip town with nary a look over your shoulder. Rent an apartment? Give yourself one point. Own a home with a big, fat mortgage? Good for you. Score three points. Someone has already done some checking and you qualified for a mortgage, so you can’t be all bad. Own your home free and clear? Even better. Take four points. You’ve proven you can pay off a sizable debt and now you have a pile of equity that the card company would love to help you spend.

Previous residence? Zero to five years (some applications only go to two years), score zero points. You move around too much! Over five years? You’re stable, so score one point.

Years on job? The longer, the better. If you have less than one year at your present employer, you’ll earn no points at all, which explains all the whining from the newly working who can’t get approved for a credit card. One to three years on the job will earn you one point. Four to six years is worth two. Over seven years at the same company and you’re probably bored out of your mind but you’ll score three points.

Most creditors belong to at least one reporting agency and share their information liberally with one another. Of course they’re more likely to believe their own information than somebody else’s. So if you paid off a loan with them, give yourself five points. Good record with other creditors should earn you two or three points.

It’s pretty obvious, but the more you make, the better. Having a savings and/or chequing account with a balance over $500 will earn you a couple of points, providing you didn’t open up the account last week.

Having a landline in your own name earns you a couple of points because creditors have a way to contact you if you fall behind in payments. Since they can’t use your cell phone to actually locate you physically, it doesn’t count.

GAIL’S TIPS

I don’t have the best credit score going. Does that surprise you? The main reason is that i’m determined to pay off my credit cards in full every month so i incur no interest. Not very profitable, am i? And that’s why my score is lower. if i made my minimum payment every month, my score would be higher.

I’m not obsessed with my credit score, and neither should you be. Your credit score is only important if you’re borrowing money. Once you become debt-free, once you eliminate your dependence on other people’s money to live your life, your credit score has much less impact on your financial life.

Focusing on your credit score is a trick, a distraction from the