Did You Get Your Free Credit Score?

Did You Get Your Free Credit Score   
 
Effective July 21, 2011, the Federal Trade Commission consumers can now receive free credit scores if they apply for a loan or credit and are denied as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act. 
 
Previously consumers could receive a free copy of their credit report but in some cases it is hard for consumers to determine if they had good or bad credit. 
 
Loan providers and companies that offer credit must provide details of the credit score and why the consumer was denied.  Bad credit and low credit scores mean consumers will get higher interest rates, possibly pay upfront fees and have less than favorable credit or loan terms. 
 
The credit score will include the factors that impacted the consumers’ credit score such as late payments or maxed out credit cards. Under this new law, banks can no longer keep their in-house credit scoring models secret and must share these with consumers who are denied credit. The new law does not apply to telecommunication and insurance companies.
 
Allowing consumers to receive credit score will give them the ability to quickly see if they have good or bad credit and create a plan to increase their credit score.
 
Not all consumers can receive a free credit score.  If you were approved for loan with less than favorable terms or if your loan or credit application is rejected you can get a copy of your credit score.  If you have good credit you may not get a copy of your credit score.  Here are 7 tips to increase your credit score:
 
1.     Get current.  Pay delinquent accounts such as judgments, tax liens, foreclosures, repossessions and collection accounts first.  Then pay all other late accounts such as medical bills.
2.     Pay down debt.  Keep balances at 10-20% or less of the credit limit. Having credit cards with balances of 30% or more of the limit decreases your credit score.
3.     Pay on time.  Pay bills at least 7-10 days before the due date to avoid late fees and penalties.
4.     New accounts.  Opening more than one new account per year will lower your credit score. 
5.     Avoid closing accounts.  Closing accounts that have been open for 2 years or more can decrease your credit score. 
6.     Negotiate.  Setup payment plans to pay down debt if you cannot pay the full amount owed. Stick to the agreement until the account is paid in full.
7.     Avoid risky solutions.  Avoid filing for bankruptcy. Use bankruptcy, debt consolidation, credit repair counseling or debt settlement as a last resort. These are reported on your credit report and lower your credit score.