According to Experian’s sixth annual State of Credit report the average Vantage credit score of Jacksonville Florida residents is 654 on a scale of 300 to 850. The Vantage credit score’s national average is 673 on a scale of 300 to 850. The above scores rank fair on the credit rating scale.
Understanding how credit scores are developed elude most people. Unfortunately, people don’t want to admit that fair/poor credit is attributed to a lack of education regarding how money management decisions affects creditworthiness.
I struggled to increase my credit score and keep it in the good/excellent category so that I could become a homeowner. The process was time consuming, and difficult, but educational and worth the process. I learned lots about how my financial decisions influence my score.
As you begin the process of learning how to make positive financial steps, be wary of the many ideas and myths related to repairing your credit and increasing your score. Every week I have the pleasure of participating in Experian’s Credit Chat. This forum allows me to ask credit report and repair questions.
As you begin this journey, I want to share a few myths regarding credit scores and your report.
- Medical Collections do not count against you as much as other collection accounts. This is not correct. If your medical bills become assigned to collections, it will report negatively on your credit. The account will report negatively on your credit 7 years from the date the account became delinquent. Solution: do everything to avoid the account going to collections.
- If you pay off debt, it must be removed from your credit report; This too is a misnomer. Once the debt is paid, the creditor must report to the credit-reporting agency that the account is paid in full or settled for less than owed. The account will stay on your credit 7 years from the delinquency date. Paying off debt does not remove it from your credit.
- The credit-reporting agency grants or denies credit; This is not true. Credit reporting agencies maintain a file of your creditors and reports if you pay them on time or late. The creditor sends a report of your monthly payment behavior (in most cases) to the credit reporting agencies and they share the information with potential creditors you authorize to look at your file. Credit reporting agencies, such as Experian, Transunion, and Equifax neither grants nor denies credit.
- The credit-reporting agency determines your credit score. Credit reporting agencies report only the information provided them by your creditors. The creditor or potential creditor, determines the score based on their own criteria. FICO (Fair Isaac Corporation) and Vantage are separate organizations that developed the credit scoring systems that creditors use to determine your score. However, Experian owns one of the company’s that provides credit scores to clients who want them, but Experian and the other credit bureaus, do not provide the score.
- Adding an explanation to your credit report will help your situation. Unfortunately, this is inaccurate. Credit reporting agencies do not grant credit, so attaching a letter explaining the reason for your late payments on a particular account are not considered when granting credit. Remember, credit reporting agencies do not grant or deny credit. Therefore, attaching a letter of explanation to your file is rarely, if ever, read.
Making positive financial decisions is the only way to see improvements on your credit file. Begin today by committing to get the education necessary to change your financial future to #StopBroke-i$m!