credit score

Credit Score - How to Sink Your Credit Score - Yahoo! News

How to Sink Your Credit Score – Yahoo! News

The suits at Fair Isaac Corporation sure are good at what they do. How else can you explain the meteoric rise in importance of the lowly credit score? It's not just any credit score, either. The FICO credit score stands head and shoulders above the competition by a wide margin. In fact, all non-FICO scores are pejoratively referred to as FAKO scores since, while “valid,” carry little weight with creditors.

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So what if you wanted to fight the system and trash your credit score? What if you wanted to bite your thumb at the people who think your entire life, your value to society, and everything you're worth should be tied to a three-digit number? Fortunately trashing your score is actually quite easy.

Skip Payments

Stop making payments on your credit cards. Don't pay them late, simply do not pay them. 35 percent of your FICO credit score is based on your payment history. Your credit score is a reflection of how likely you are to default on your debts. The easiest way to show you're a huge risk is if you stop making payments to your existing obligations. If you can't pay your current debts, you stand no chance of paying any new ones, so your credit score has no place to go but down!

If you really want to make it hurt, stop paying entirely and let it go into collections. Your score will suffer with each passing month and having an account go to collections will certainly put it out of its misery.

Apply for a Dozen Credit Cards

Whenever you apply for credit, whether it's a mortgage loan or a credit card, the lender will make a hard inquiry on your report. Hard inquiries lower your score and too many hard inquiries are an indication that you're a credit risk. It's the old adage – the bank will only give you money if you don't need it. If you have a lot of recent hard inquiries, lenders start to wonder why and the credit score formulas reflect this sentiment by lowering your score for each hard inquiry. Besides not paying your debt, applying for a lot of credit very quickly can have a disastrous effect on your score.

Don't Review Your Report

Experts will tell you that one of the most important things you can do to combat identity theft and keep your score up is review your credit reports regularly. The Fair Credit Reporting Act requires the three bureaus to give you access to your report once every twelve months, so don't take advantage of it if you want to sink your score! Let the errors persist, don't fix the problems, and let someone steal your identity and run free with your credit. If you fix those problems, it'll be much harder to keep that score low.

[See 5 Ways to Quickly Boost Your Credit Score]

Run Up Large Balances

Credit utilization is another important metric in the credit score formula. It's a measure of how much of your existing credit you are currently using. Take your total balances on your cards at statement closing and divide by your total credit limit across all cards, that number is your credit utilization. Experts warn that you should keep that under double digits, but savvy credit score killers know that it's far more fun to run up a debt and get that utilization solidly in the double digits. If 10% utilization is bad, 20% has to be worse. If 20% is worse, 50% has to be miserable.

If you don't want to run up a large balance, you can try to reduce your total credit limit by canceling credit cards or asking for a credit limit reduction.

Declare Bankruptcy

If all else fails, or your score just simply isn't terrible enough for you, declare bankruptcy. Declaring bankruptcy is actually much harder than it used to be but if you're able to navigate through the system of debt specialists, declaring bankruptcy will surely trash your score for years to come.

I hope you've all recognized that this is a joke and that you should do the exact opposite of everything you've read. Your credit score has become very important in daily life and sinking your credit score will make life much harder on you in ways you never anticipated. A future employer may use your credit score as part of their hiring decision or a landlord may balk at renting to you because you have difficult proving you can pay the rent on time.

It's an imperfect system but it's the one we have. We still use miles and pounds, rather than kilometers and kilograms, and the credit score is here to stay.

Jim Wang writes about personal finance at Bargaineering.com.

Getting the best personal loan rates is not always easy. If a borrower has some type of collateral to offer for security on the personal loan they are seeking there is a good chance they can get some of the best personal loan rates. Those individuals are considered a low risk therefore lenders offer lower interest rates.

The best way to get the lowest personal loans rates is to be sure that you have an excellent credit score. Quite often people have no clue what their credit score is. All individuals looking to take out a personal loan with low personal loan rates will want to request a copy of their credit report before they begin applying to lenders.

It is crucial for those looking for the best personal loan rates to review their credit report for any inaccuracies or credit issues that need resolving. Inaccuracies are the cause of approximately 25% of all the lowered credit scores. The other reason is not enough credit. The borrower needs to make sure they have a way to raise their credit score before applying if they would like to get the best possible personal loan rates available.

The quickest way to raise your credit score to get the best personal loan rates is to pay down all the balances on your credit cards to a minimum of 20% of their limits. You can get a leap in credit score from this in as little as 30 days to up to 30 points. It is always important to do this prior to applying for a loan with the best personal loan rates because you lose a point on your credit score for each application you submit without including an accurate credit report. It is safe to say that if the borrower tries to lie about their credit score the lender will not give them good personal loan rates.

Finding Good Personal Loan Rates When Your Loan Is Unsecured

For those consumers looking into unsecured personal loan rates, do not be surprised if they are a bit higher than those for a secured personal loan. Borrowers must have excellent credit to get low personal loan rates without any collateral. It will be difficult for some lenders to offer you low personal loan rates that are the same as those with collateral. For loan companies and lenders, an unsecured loan is a much higher risk.

Quite often lenders will raise personal loan rates to protect their investment. Your best bet is to shop around for many lenders. The market is so competitive today you will be able to find some lenders willing to give the best unsecured personal loan rates available. It is wise to shop not only through local banks, but also to do comparison-shopping on the Internet as well.

The borrower’s credit report is what will determine what personal loan rates are offered to him or her. Be sure to check your credit score for mistakes that might make your personal loan rates go up before applying for your unsecured personal loan. If there are some errors that need to be cleaned up to lower your personal loan rates, wait approximately 1-2 months to apply. This will make sure your credit score is the best it can be so you can get the best personal loans rates available to you at the time.

About The Author

Paul Rogers writes general finance and loan articles for the Loans UK Online website at http://www.loansukonline.co.uk