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Got this from the myfico website...There have been many questions lately about whether debt counseling/consolidation affects your score..According to this article, it does not!

[quote]What is Not In Your Score

FICO® scores consider a wide range of information on your credit report. However, they do not consider:

Your race, color, religion, national origin, sex and marital status.
US law prohibits credit scoring from considering these facts, as well as any receipt of public assistance, or the exercise of any consumer right under the Consumer Credit Protection Act.
Your age.
Other types of scores may consider your age, but FICO scores don't.
Your salary, occupation, title, employer, date employed or employment history.
Lenders may consider this information, however, as may other types of scores.
Where you live.
Any interest rate being charged on a particular credit card or other account.
Any items reported as child/family support obligations or rental agreements.
Certain types of inquiries (requests for your credit report).
The score does not count “consumer-initiated” inquiries – requests you have made for your credit report, in order to check it. It also does not count “promotional inquiries” – requests made by lenders in order to make you a “pre-approved” credit offer – or “administrative inquiries” – requests made by lenders to review your account with them. Requests that are marked as coming from employers are not counted either.
Any information not found in your credit report.
Any information that is not proven to be predictive of future credit performance.
Whether or not you are participating in a credit counseling of any kind.[/quote]




Thanks for the great post Jessi. I have also seen people arguing on whether debt consolidation hurts or not. This post will put a full stop on all the arguments.

I have read somewhere that consolidation des not affect credit score; however, future creditors might not like it. This is again a controversial topic. See paying bills through consolidation is far better than not paying, then why creditors would dislike it?

Jessi now compile the points that are in credit score and post it here. I am waiting???

Sub: #1 posted on Tue, 04/04/2006 - 18:15

stella stella

(Posts: 488 | Credits: )

Thanks for the info.

Sub: #2 posted on Tue, 04/04/2006 - 19:18

landrylou landrylou

(Posts: 310 | Credits: )

Well, lenders may not like it, BUT at the time you are in consolidation, you should be concentrating on getting OUT of consolidation, not adding more debt, right? :)

Here is what IS included in your credit score..

Quote:
Payment History

Account payment information on specific types of accounts (credit cards, retail accounts, installment loans, finance company accounts, mortgage, etc.)
Presence of adverse public records (bankruptcy, judgements, suits, liens, wage attachments, etc.), collection items, and/or delinquency (past due items)
Severity of delinquency (how long past due)
Amount past due on delinquent accounts or collection items
Time since (recency of) past due items (delinquency), adverse public records (if any), or collection items (if any)
Number of past due items on file
Number of accounts paid as agreed

Amounts Owed
Amount owing on accounts
Amount owing on specific types of accounts
Lack of a specific type of balance, in some cases
Number of accounts with balances
Proportion of credit lines used (proportion of balances to total credit limits on certain types of revolving accounts)
Proportion of installment loan amounts still owing (proportion of balance to original loan amount on certain types of installment loans)

Length of Credit History
Time since accounts opened
Time since accounts opened, by specific type of account
Time since account activity

New Credit
Number of recently opened accounts, and proportion of accounts that are recently opened, by type of account
Number of recent credit inquiries
Time since recent account opening(s), by type of account
Time since credit inquiry(s)
Re-establishment of positive credit history following past payment problems

Types of Credit Used
Number of (presence, prevalence, and recent information on) various types of accounts (credit cards, retail accounts, installment loans, mortgage, consumer finance accounts, etc.)

Please note that:

A score takes into consideration all these categories of information, not just one or two.
No one piece of information or factor alone will determine your score.
The importance of any factor depends on the overall information in your credit report.
For some people, a given factor may be more important than for someone else with a different credit history. In addition, as the information in your credit report changes, so does the importance of any factor in determining your score. Thus, it's impossible to say exactly how important any single factor is in determining your score - even the levels of importance shown here are for the general population, and will be different for different credit profiles. What's important is the mix of information, which varies from person to person, and for any one person over time.
Your FICO score only looks at information in your credit report.
However, lenders look at many things when making a credit decision including your income, how long you have worked at your present job and the kind of credit you are requesting.
Your score considers both positive and negative information in your credit report.
Late payments will lower your score, but establishing or re-establishing a good track record of making payments on time will raise your score.
[/quote]

Sub: #3 posted on Wed, 04/05/2006 - 04:48

Jessi Jessi

(Posts: 3361 | Credits: )

Great post Jessi. I would just like to add 2 very important things to note. For one, the fact that you are in credit counseling does appear as a note on your credit report. As stated, it does NOT affect your score. However, lenders can see it. The fact is, lenders are human, and different lenders have different opinions on credit counseling. Some see it as a negative and will decline giving you credit, while others see it as a positive and may grant you credit.

A second important thing involves the impact on your credit score. Once again, the fact that you are in credit counseling does not affect your score. However, this is a bit misleading. The truth is, when you are in credit counseling all of your accounts must be closed. This does have the initial effect of causing a drop in your credit score for some people (particularly those that still have good credit and had a longer credit history). This drop is generally temporary, and your score will usually improve as you pay down your debt. For most people who are considering credit counseling, this is not an issue. For them, the benefits of credit counseling often far outweigh any disadvantages of closing accounts. The exception is when someone has great credit and can afford to comfortably pay off one's debt on one's own. In this case, debt consolidation may not be the best option. I hope that is not too confusing, but I just want everyone to have ALL of the facts.

Sub: #4 posted on Wed, 04/05/2006 - 08:06

dmj210 dmj210

(Posts: 123 | Credits: )

Yes dmj has some good points over here. Sudden closure of all accounts might cause a drop in your score. But it is temporary. The benefits of debt consolidation are felt afterwards.

Sub: #5 posted on Wed, 04/05/2006 - 13:23

stella stella

(Posts: 488 | Credits: )

i dont understand the whole credit score at all.

Sub: #6 posted on Sat, 06/24/2006 - 12:21

identity_crisis04 identity_crisis04

(Posts: 212 | Credits: )

Credit is a vast subject. Which portion is unclear to you, identity? I will be glad to offer some suggestions.

Sub: #7 posted on Sat, 06/24/2006 - 13:00

GunsNroses GunsNroses

(Posts: 485 | Credits: )

This may sound pretty stupid but are factored into a credit score? I've been told both ways "yes they are" and "no they aren't" which one is correct and is it legit for the companies to keep placing these bills under the collections heading even though a payment agreement has been setup and monthly payments are being made?

Sub: #8 posted on Sat, 07/08/2006 - 23:56

CryoBear CryoBear

(Posts: 15 | Credits: )

oops the missing part of the above post is medical bills sorry lol

Sub: #9 posted on Sat, 07/08/2006 - 23:57

CryoBear CryoBear

(Posts: 15 | Credits: )

Hi... I am trying to buy a house with my fiance, and I have 2 negative posts on my credit - one is a 60day late from 2001, the other is a 30day late in Feb 06. I need to get these things removed to up my credit score and get a better rate. I need some help talking with the creditor for the Feb 06 incident. My lender has suggested I dispute the late charge - but if I were actually late, what do I do? I have since closed the account, and the dollar amount was very small....

Thanks for your help.

Sub: #10 posted on Wed, 07/19/2006 - 09:02

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