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Credit Score Facts You Must Know Discover a Dozen Critical Facts That Impact Your Credit Score!

Philip X. Tirone

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Critical Credit Fact 1:

You can boost your credit score and lower your personal debt if you establish separate credit from your spouse. Entrepreneurs in particular can benefit from this tip, which allows you to use your spouse's credit when applying for a loan or line of credit. It works like this - When applying for credit, transfer high credit card balances to your spouse's credit cards. As your outstanding debt is lowered, your credit score will increase, which makes you look like a more favorable candidate for the loan. Of course you will have to return the favor if your spouse ever needs a quick credit score increase.

Critical Credit Fact 2:

A lackluster credit score may mean higher auto insurance premiums. You probably already know that people with bad credit are likely to have high interest rates on their credit cards, mortgages, and car loans. But you probably didn't know that bad credit means that in most states your auto insurance premiums are higher, yet another reason those three little numbers can have a six-digit impact on your life!

Critical Credit Fact 3:

4 out of 5 people have at least one error on their credit reports. According to a U. S. Public Interest Research Group survey, almost 80 percent of people have errors on their credit reports, 25 percent of which are serious enough to cause a person to be turned down for a job or loan.

Critical Credit Fact 4:

Perhaps the most common (and among the most damaging) error on a credit report is a duplicate collection notice. If you notice more than one collection agency reporting your account to the credit bureaus, you should work quickly to have this removed. Accounts that have been turned over for collection are often sold by one collection company to another. As a result, your outstanding debt will be listed multiple times.

Keep in mind that when a bill is turned over the collection, it will appear twice on your credit report: 1) the original creditor will keep the account on your credit report, noting the delinquent payment history and that the account has been turned over for collection; 2) as well, the collection agency responsible for collecting the debt will list the account. However, if multiple collection agencies are reporting that they are collecting on the same account, demand that the duplicate entries be removed

Critical Credit Fact 5:

Collection accounts only minimally hurt your credit after two years, and after four years, the damage is all but erased. After seven years, a collection account is wiped from your report.

Critical Credit Fact 6:

You should always apply for credit using the same first, middle, and last name. For instance, if your name is Robert Michael Jones, Jr. , you shouldn't apply as Bob M. Jones, Jr. , or any of the other variations of your name. Pick one name and stick with it, or risk having your credit information divided among the various names. Worse yet, it could be merged with another person's information (for instance, if you are Robert Michael Jones, Jr. , and your father is Robert Michael Jones, the credit bureaus might combine your files if you do not use “Jr. " when applying for credit).

That said - if you changed your last name upon marrying, start applying for credit under your new name. It might hurt your credit minimally, but the damage will be temporary; the new last name is forever.

Critical Credit Fact 7:

Purchasing a car, furniture, a computer, or other large household appliance through an installment loan might help your credit. An installment loan is a purchase agreement whereby the borrower repays the loan in equal periodic payments. Having an installment loan is one of the fastest ways to increase your credit score. If you don't have an installment loan, consider asking your local bank for a small loan ($1,000) secured by your existing car, or purchase your next computer or household appliance through an installment loan.

Many furniture stores also offer installment loans, but shoppers should be aware that it is sometimes difficult to determine whether they are purchasing items through an installment loan or a retail account. Be sure to ask.

Critical Credit Fact 8:

A single late payment on one card can affect the interest rates on all of your credit cards. Many borrowers are surprised to learn about the Universal Default Clause, a small-print item you probably agreed to when applying for your most recent credit card. The Universal Default Clause allows credit card companies to charge you a 29.9 percent interest rate (or higher) if you ever make a late payment on any one credit card, even if that card isn't issued by that company. Credit card companies periodically pull your credit report and raise your interest rate based on the history of other accounts your maintain. Credit card companies say that they believe your behavior on one credit card might be the same on all credit cards.

Critical Credit Fact 9:

Closing your credit cards could hurt your score, and it will almost never help your score. Because the length of time you have had credit affects about 15 percent of your credit score, closing a credit account will lower the average age of your accounts. Allowing credit cards to become inactive also hurts your score. Use credits at least once a month, and keep them open!

Critical Credit Fact 10:

Your score will not harmed by inquiries into your own credit report. If you request your own credit score, the inquiry will show up as a soft inquiry. Unlike hard inquiries (those pulled by potential lenders as a way to determine whether they should approve a loan or credit application), soft inquiries do not affect your credit score.

Critical Credit Fact 11:

If your credit score is high enough, some lenders won't consider your salary before giving you the lowest available interest rate. Indeed, your credit score is perhaps the most important factor in determining whether lenders approve your credit card application, mortgage loan, or car loan. It matters more than your annual salary and much, much more than your net worth.

Critical Credit Fact 12:

Walt Disney and Mark Twain both claimed bankruptcy. Bad credit happens to all types of people. The true test of character and responsibility is how a person deals with bad credit. Do not ignore it, hope it disappears and bury your head in the sand? Or do you jump in, learn how to fix your mistakes and move forward?

You credit score can have a significant impact on your life - It is your financial reputation. A credit score below 720 makes you a higher credit risk to lenders and creditors. On the other hand, a credit score of 720 or greater in most cases automatically qualifies you for the very best loans, deals and credit at the lowest interest rates. Knowing the facts can make a huge difference in how you decide to pursue the path to excellent credit health.

To learn more, download my FREE E-Book “38 Facts I Bet You Didn't Know About Credit" at

About the Author

Philip X. Tirone is an expert in residential financing and credit scoring and author of “7 STEPS TO A 720® CREDIT SCORE" - a must read for increasing your credit score to above. “7 STEPS TO A 720® CREDIT SCORE" is the epicenter of his popular “7 STEPS TO A 720® CREDIT SCORE" Credit Literacy, Credit-Improvement and Credit Management System.

This system was created when Tirone observed that good people with good intentions were consistently turned down for home loans because of less than stellar credit scores. Based on patterns of change identified by studying tens of thousands of credit reports, the system is available to the public and is also used by real estate agents, mortgage brokers, investment advisors, and accountants across the nation to help borrowers save money, qualify for the best loans, and reduce interest payments.

Tirone's programs have been featured in the “Los Angeles Times", “New", “Wall Street Journal", “Newsday", “Woman's World Magazine", “San Francisco Chronicle", “Bottom Line Magazine", and “" amongst others. He is featured in the New York Times bestseller, “Secrets of the Young and Successful" and Dan Sullivan's new book, “Industry Transformers", which identifies eight individuals, who having a profound impact on their industry by creating meaningful ways for their clients to by-pass the bureaucracy and red tape"

For additional information on 7 STEPS TO A 720® CREDIT SCORE products and services call 877.720. SCORE (7267). Or visit

Copyright © 2008 Philip X. Tirone. 7 Steps to 720, LLC. All rights reserved.


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