Build

It's much easier to start with good habits than to repair black marks later on.                                                                 

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Restore

You are invited to the most effective program available to clear mistakes made by creditors.

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Protect

Once you have obtained excellent credit, it is necessary for you to protect it.                                             

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Quick FAQs

Frequently Asked Questions & answers regarding your credit future 


Q. What is a credit score?
A.
A credit score is a numerical rating that attempts to measure a borrower’s creditworthiness. The score indicates the borrower’s general payment behaviors—summarizing how often the person pays their bills and obligations on time. A high credit score does not guarantee that a loan applicant will never default on a mortgage; however, that person represents a statistically smaller risk to a lender than a person with a low score. Lenders and creditors, therefore, are more likely to approve loans and offer their most-favorable terms to people with the highest scores.

Credit scores have been used for more than three decades by lenders and creditors as an objective way to decide whether to offer consumers credit cards, home loans and car loans.

The score is based on the data that a person has on record at the Credit Reporting Agency (Bureau).It is common for an individual’s score to differ slightly from one Bureau to another. That’s because the score is developed only from the credit information on file at each particular bureau, and information may vary from one Bureau to the next.The Bureaus can only report the data that is sent to them from the lenders, creditors and companies that report such data to them.

Scores are determined by weighing several factors in a person’s credit record, including payment history, balances, number and types of credit accounts. By using a formula, results can be more objective than humans relying on different criteria to create a measurement. Credit scores do not consider a borrower’s race, gender, religion, age, income, marital status, or national origin. But mathematical formulas have limitations. For example, a person who has always paid cash for purchases will score low due to a lack of credit history. Many lenders, therefore, do not rely exclusively on a credit score and will take other factors into account that may mitigate a poor credit score.  

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Q. What factors go into the credit-score formula?
A.
A score is derived in part from a consumer’s payment history. That is, do you pay credit cards, mortgage, and car-loan payments on time, and is your history free from ‘past-due’ amounts, bankruptcies, foreclosures, wage attachments, liens, etc.? As you might imagine, the more recent and larger a negative item, the farther it drags your score down. Also, the more instances you have of a problem, the lower goes your score.

Amounts owed by a person also factor into part of your score. The total amount owed, whether you are close to the maximum amount on credit cards, how many accounts you have, and what balances remain on installment loans all come into play in this area. The larger the debt you have on a card and the closer that amount is to your card limit, the more likely it is that your score will drop.Managing your debt is important.Making your payments on time and restricting your purchases to live within your financial means is also important.The lower amount of credit card debt you have the better off you are.Remember that in many cases, a small balance on a credit card with on-time payments may be better than carrying no balance.

Another part of your score comes from the length of your credit history, including how long specific accounts have been established and the length of time since you used specific accounts. Another part of your score is determined by how many new accounts and requests for credit you have. Remember, a score is just one important indicator of your creditworthiness.Other key factors include your assets, your liquidity and your monthly expenditures.  

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Q. What is a good score?
A.
Generally, the higher the score the better.Credit scores range from 350-850. The lower the person’s score, the higher the credit risk (or bill paying risk) they are assigned. The answer to “what is a good score?” is: “It depends.”While no industry standard exists for making decisions based on scores, and most creditors and lenders would be wise to evaluate other factors including a person’s score, most companies would look favorably on a score in the 700s or above.

Yet, for some situations, a score of 630 would be considered good, given other financial strength factors are also good.In general, a lower credit score will cause a person’s cost of living to increase.Low scores, in the 500’s and lower, can cause insurance costs to increase and cause utility costs to be higher.So, bottom-line, monitor your score, and make bill payments on time to improve your score.  

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Q. Who calculates credit scores?
A.
When a lender or a credit grantor requests your score, it is calculated by a computer at the lender's location, by a third-party service provider such as a mortgage reporting agency, or may be applied at a consumer reporting agency. The score is one of many pieces of information the lender and creditor may use in evaluating your credit application. Community Empower uses a sophisticated method to calculate your score to most closely match your true mid-score.The mid score is the ‘middle’ score of the three reports a lender will often retrieve when you apply for a home loan.  

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Q. How often do credit scores change?
A. Your credit score is a fluid number that changes as your credit report changes. Therefore, any change to your credit report due to a reported financial transaction could impact your score, almost on a daily basis for some people. When you enroll in Community Empower for a period of longer than 1 month, you will get a new analysis and score calculation once every 30 days.  

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Q. Will I be penalized for shopping around for the best interest rate?
A.
Credit scores count every consumer-initiated credit application. Therefore, excessive applications for credit can adversely affect a score. However, it is slowly becoming more common for risk score models to recognize when a consumer is shopping for the best rates and either ignore inquiries for a specific purpose within a period of time, or count multiple inquiries for a specific purpose as only one. This is most common in mortgage and auto lending. In such cases, shopping around may have little or no impact on a person’s credit score. Tip: Your best choice is to use Community Empower to qualify you for a loan. When you enroll, the system will automatically alert you when you have become pre-qualified for a loan - without harming your score.  

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Q. Why is my Community Empower credit score different than the score reported by my lender or other credit reporting companies?
A.
There are many different credit score models. The model used to calculate the score you obtain, and the score itself, may be different than the one the lender uses in making its decision. For instance, you may get a generic credit risk score from a Bureau, but an auto lender might use its own custom-scoring model with a different scale, so the numbers won't be the same but will likely represent a similar level of risk. Community Empower uses a sophisticated method to calculate your score to most closely match your true mid-score, as used by most mortgage lenders.  

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Q. What if I don't have a credit score?
A. Credit scoring models cannot generate a score unless there is sufficient credit information. If you have little or no credit history, you will probably not have a credit score available. If you have never had a credit account, try applying for a retail, gas or secured credit card to begin your credit history. Some banks offer a secured debit card or “check card” with their checking accounts that can migrate to a credit card with 6 months of current payment usage. If you keep your outstanding debt low and pay your bills on time, before long you'll receive additional offers for credit. However, you may want to be cautious and only apply for credit that you really need.  

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Q. Does having too many credit cards affect my credit score?
A. There is no magic number of cards. It depends on the ‘amount owed’ balance a person carries on each of the credit cards. Having too many credit cards with either high balances or large amounts of credit available can negatively impact risk scores depending on the person’s overall credit history. Alternatively, having several cards with a modest balance and a good ‘paid-on-time’ history will always improve a person’s credit score.  

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Q. Do late payments affect my credit score?
A.
Absolutely.Paying bills on time is generally the single most important contributor to a good credit score. Being late on any bill, for any length of time, is a possible indication of future non-payment of debt and is almost always viewed negatively by lenders. Any late payments will remain on your credit report for up to seven years.  

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Q. Does every inquiry (or credit file request) affect my credit score?
A. Credit scores only consider inquiries initiated by the consumer. These include mortgage applications, credit card applications and auto loan applications. Inquiries that don't affect scores include: requests by you to the consumer reporting agency for your personal report, lenders using credit information for account review purposes rather than credit granting or application purposes, lenders using credit information for "pre-approved" credit offers, or inquiries for use in making employment decisions. Inquiries that don't impact risk scores are called a “soft pull.”The mortgage, credit card and auto loan application and credit granting inquiries are known as “hard pulls.”Community Empower uses the “soft-pull” method so that your credit score is not affected by our service.  

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