Excerpt From Credit Scoring Secrets - What They Don't Want You To Know
Credit scoring is something that most people have heard about, but few people understand. I have found that when people have some basic information on a subject, they can be very difficult to teach (hence the saying, “A little bit of knowledge can be dangerous”). An example of this arose when a man once came to my mortgage office seeking advice on raising his credit score so that he could obtain a mortgage. I had spent nearly an hour reviewing his credit and making notes prior to his arrival. He was a mountain of a man, probably 6’ 4” and 250 pounds. As I attempted to go over his credit file and offer him my advice, he continually interrupted me by saying, “I know.” This went on for about twenty minutes and I politely ended our meeting without being able to really give him much help. About three months later, he returned to my office eager to have me check his credit report. As he waited patiently, with a big grin on his face, I had to ask him what he had done and why he was so excited to see his credit report. He told me, “Just pull it up and you will see.” I did, and the results were shocking to me and devastating to this young man.
I shared with him that his credit score had dropped about one hundred points since his last visit. This huge guy started to cry in my office. At this point, I was confused and very nervous about the prospect of this guy starting to turn over desks and file cabinets out of anger. I asked him to share with me what he had done since we last met. He explained that with money from his parents, and several thousand dollars borrowed from his retirement plan, he paid off all of his bad debts and credit cards (and closed them). While still very upset, he asked me, “Are you saying that because I did this, I won’t be able to get approved to buy a house now?” The answer was yes, at least for the time being. This story really exemplifies the kind of crazy scenarios that I have witnessed over the last several years. It was a whole new experience to me to actually review thousands of credit reports and witness first hand the cause and effect of people’s actions on their scores. Doing what you might think is right, could actually destroy your credit. I will address later in this book why paying off some bad debts may not be a good idea and how this could even make your score lower, as in the story above.
If you are currently working on improving your credit score, I hope you will consider purchasing my new e Book through Amazon.com. Link To Purchase.
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James L. Paris
Editor-In-Chief ChristianMoney.com
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