For years, people have been consolidating to personal loans to boost their credit and get away from credit card debt. Now, they might see negative consequences for it. FICO will be updating the way it decides credit scores and the changes will have a big impact on how personal loans are handled.
This new system is designed to reduce the number of defaults for credit cards, car loans, and mortgages, which will allow lenders to avoid unexpected credit risk and improve the rate of default.
However, If you’ve moved any of your credit card debt over to a personal loan in recent years, it’s possible that your credit score will drop significantly. This is especially true if you’re using up to 30% of your credit limit or higher.
5 Ways To Obtain Good Credit Under The New FICO Scoring System
It all comes down to being responsible with your finances. You can obtain good credit by:
- Paying your bills on time every time.
- Keeping your balances low.
- Avoiding applying for a lot of credit too often.
- Improving your credit utilization ratio by making payments multiple times each month.
- Reviewing your credit report regularly and correcting errors on your credit report.
Experts recommend reviewing your credit report every six months, but a minimum of once per year. You can get one free credit report per year from each of the credit bureaus at this website.
Sometimes life isn’t as simple as taking five steps. Circumstances change quickly and debt can accumulate quickly. If you find yourself struggling to get your head above water financially, bankruptcy may be your best solution.
If you’re considering bankruptcy to recover from your financial burden, you need to work with an experienced attorney through the process.
Need Debt Relief? Contact Experienced Bankruptcy Attorney Joel R. Spivack Today!
At the Law Office of Joel R. Spivack, we specifically focus on helping clients get through challenging financial times. If you need guidance and support for your unique situation, reach out to Attorney Joel Spivack today. He will help you regain control of your financial situation.
Attorney Spivack offers a free, face-to-face consultation at our office in Cherry Hill, NJ. He will provide you with honest answers to your questions and tell you how he can make the process go as smoothly as possible for your specific issues. Call 856-488-1200 or fill out our online contact form here.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.