FICO DISCLOSES EFFECT OF CREDIT MISTAKES ON SCORE - By: Stu Lieberman

For the first time, and with unusual candor, FICO revealed “damage point” data and how exactly credit mistakes affect credit scores. These “damage points”, depending on the reason for the credit mistake, can reduce your score by 10 to 240 points. The higher your credit score – The more damage the SAME credit mistake can affect your FICO score.

Common examples that affect your credit score are:
Making late payments can decrease your score between 60 and 110 points
Maxing out your credit card or exhausting your credit limit can decrease your score between 10 and 45 points
Negotiating DEBT SETTLEMENTS with creditors can decrease your score between 45 and 125 points

Filing for bankruptcy can decrease your score between 130 to 240 points
Understanding what affects your credit score is important and how that impacts not only your ability to get credit in the future, but how much you now may pay monthly because it also causes your interest rate to adjust.
In order to avoid situations that negatively affect your FICO credit score you may consider talking with a reputable Credit Counseling Service company. “The circumstances identified by FICO that can damage your credit score; all can be avoided by receiving credit counseling and employing a structured debt management plan.

The debt management plan will ensure that you maintain on-time payments of your obligations while you systematically reduce your debt; all of which translates to an improved FICO score” says Steven Stark, Chief Operating Officer and General Counsel at A New Horizon Credit Counseling Services in Fort Lauderdale, Florida.

At the end of the day, it is all about protecting your credit score and not allowing monthly payment s on credit cards or mortgage loans to increase or even worse, losing your ability to get credit. “If your FICO score improves by using a debt management plan, the money saved because of the higher score can be used to repay your debt that much quicker” added Stark.
If you would like more information on how credit counseling may help your FICO score contact us at (800) 556-1548 Extension 1126. A New Horizon Credit Counseling – http://www.anewhorizon.org

About the Author

Been in the Credit Counseling business for over 14 yrs. Writing articles about debt consolidation and how to help you. Credit card debt consolidation c

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