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Common Questions About Credit Scores!

If you’re interested in learning more about credit scores, you’ll want to read on. We’ll answer some of the most common questions people have about credit scores.

What is an average credit score?

The average American score is believed to be around 680 according to a recent Experian report. While this is average, 58% of the US population has a credit score of 700 or higher.

I have some collections that are five years old. Will paying them improve my credit score?

No! Paying off these bills will likely lower your FICO score. What you want to do is call the creditor and let them know that you want to pay the bill. Tell them you will pay in full if they agree to remove the account from your credit file or remove all negative history associated with the account. If they agree to this (which they probably will) ask them to fax you a letter outlining your agreement.

Once you have the letter, review it carefully. Creditors will often try to confuse you and say they will report the account as current. This is not what you want. You want all negative history completely removed from your credit file. Once you have a letter saying this, make the payment. You’ll want to keep an eye on your credit report after doing this. If the creditor doesn’t update it correctly, you can use the letter to dispute the account with the credit bureaus.

What is the best thing I can do to raise my FICO?

The best thing you can do to improve your credit scores quickly is to pay off your revolving debt. The amount you owe compared to your total available credit accounts for 30% of your overall credit score. Simply paying off credit card debt can increase your credit score by 60 points or more. (Assuming you’re currently close to 100% rolling utilization.)

How do errors in my file affect my score?

It is estimated that 89% of all credit reports have errors. While an incorrect address won’t hurt you, many errors will! Has your creditor sent you something in the mail offering to let you skip a month for Christmas and then informing you that your payment is late? Or maybe you have an account that’s more than seven years old since the date of last activity that’s still being reported. The credit bureaus never verify any information they report, so it’s up to you to clean up the errors on your credit reports.

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