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Monthly Archives: February 2017


The 10% Rule And Your Credit Scores


Credit card balances can bounce your scores around every month.  Max out your card and your scores plummet, pay off your cards and scores jump.  This is due to “credit utilization” on your revolving credit accounts (credit cards).  In the FICO scoring model, your utilization is reflected in 30% of your credit rating.  This is the 2nd largest factor to your credit rating, only behind payment history which is 35% of your rating.

There are online “what if ” simulators I’ve worked with over the years, and I’ve run numerous scenarios on credit utilization and your credit scores.  I’ve run simulation on paying off credit cards, paying down to 30% of limits, and down to 10% of limits.  On all the simulators I’ve found, the most points for your credit scores isn’t to pay off your credit cards, but to have them at a 10% balance of the credit limit.

So the next time you’re trying to raise your credit scores for a mortgage or auto loan, pay down your credit cards to 10% of the credit limit.  You’ll have to wait until your next statement is generated for the balance to report to the credit bureaus to help your scores.  Or you can “Rapid Rescore” those balances to update in a week.  A Rapid Rescore is an unscheduled update your credit accounts.



Why You Should Not Use Credit Karma



Ya know that old saying, what is free isn’t good and what is good isn’t free??  Well the same applies to this website.

Credit Karma has been around for years giving away free credit report and score info.  Most people flock to this website because it is free.  But what most don’t realize is that the information on the site can be misleading (credit scores) or just plain incorrect.

Let’s first talk about the credit scores on the site.  Those scores are what are called “Vantage 3.0 Credit Scores”.  To my knowledge, no bank uses this credit scoring model.  So they are not only useless but can also be higher (by a lot) than a credit score that a bank will use to extend you credit (FICO score).

So to most people’s surprise, they go to Credit  Karma and see a credit score of 680 for example.  They then go to a bank for a mortgage or auto loan and the bank pulls a FICO score which ends up being a 620.

Next let’s talk about what Credit Karma really is, it’s an advertising site for credit cards, auto loans, mortgage loans, and even credit repair.  Your information is being collected and shared with companies willing to pay for the data.  When you apply for a credit card, auto loan, mortgage loan, or credit repair through the site they get paid from the advertiser.

So what’s the big deal with that?  Well, in order to put you infront of their advertisers Credit Karma will send you false email alerts that your credit info has changed (for the worse).

Case in point, I was emailed an alert from Credit Karma stating that one of my credit card limits was reduced.  I logged into Credit Karma to see which card’s limit was reduced.  I then called my bank to see if they lowered the limit, and they hadn’t.  So they use these deceit tactics to try and make money.

My advice is to pay for your credit monitoring.  I personally use www.PrivacyGuard.com . It’s inexpensive ($20 per month) and has a credit score simulator built into the site that will show how much your scores will go up when you pay down credit cards, bring past due accounts current, etc…  Their credit scores aren’t FICO scores, they are called CreditXpert scores which are pretty similar to FICO.

For more credit info or if you’d like me to review your credit report, please feel free to contact me direct, 7 days a week.

Thank you,

Jason Hall

President and Certified Credit Expert

Direct- 949.505.9971

Mobile- 808.633.5023

Fax- 866.567.8054