The Credit Game and You

Part Two

In Part 1 of this article, which you can find at below, I mentioned that FICO, the most widely used credit score determining service, had recently opened its “secret vault”. As part of our normal research for our clients at Silkin Management Group, I ran across this information and thought it would be valuable to share with anyone interested in addition to Silkin clients.

I’m sure you have noticed that it is not uncommon to see credit companies mysteriously lowering credit limits, and many are even closing accounts that have no delinquencies or violations on the part of the consumer.

Why is this?

Some credit companies have just tightened up the amount of credit they are willing and/or able to extend and the consumer can’t do much about it. If this has happened to you, then the best advice is to switch credit companies. With a good credit score, you should be able to procure another line of credit easily enough. Of course be aware of the fine print—check for annual fees, rewards programs and, if you plan to carry a balance month-to- month, then obviously search for a card with the best interest rate.

To help you with this there are many websites that offer information and comparison between individual credit cards. creditcards.com is one of many you can try.

However, there is another reason that you might be getting cut off from your lenders, and that is your FICO score. This is a constantly changing number, and it depends on not only on how promptly you pay your credit card bills (of course that is a primary factor), but also on a number of other spending habits. Here are some examples: If you’ve maxed out a card your score will be reduced. How much? Well that’s another interesting point and depends on where your score was. For example if your score is about 680, it will be reduced anywhere from 10-30 points. However, if your score is about 780, then it will drag it down 25-45 points!

If you are 30 days late on a payment, your score can be reduced 60-90 points if you have a 680 score and for the higher FICO range, it is a 90-110 point reduction!
If you choose to go with a debt settlement service, your score will suffer by 45-65 points for the lower FICO range, and 105-125 points if you start with the higher FICO range.

Foreclosures will cost you 85-105 points low range or 140-160 points in the higher range.

And the worst-case scenario, bankruptcy, will take off 130-150 points in the lower credit-score band. For a higher score, count on losing 220-240 points.

Keep these points in mind when using your credit cards and dealing with credit card companies. As noted above, if you max out one of your cards it can cause a significant change in your score, so think about that before you do something like that.

If you’d like more information about Silkin Management Group and its services, visit our website at: www.silkinmanagementgroup.com. You can also email us at: info@silkinmanagementgroup.com or call Silkin Management Group at 800-695-0257.

Lyn Ribisi
Appointment Coordinator
Silkin Management Group

The Credit Game And You

Part One

You likely have read recently about the ethics of the large banks that were bailed out by you and me…the taxpayers. In fact President Obama is now talking about putting restrictions on the large banks to hopefully prevent this type of catastrophe from occurring again.

Meanwhile, most of our personal credit activities have taken a hit in the last year. You may have experienced this through difficulty in getting a loan or changes in your credit card rules and rates. In fact you might be asking yourself, “What did I do to make my credit card company hate me?” Maybe you’ve had your card limits lowered, or even had some cards canceled for no apparent reason. You have made all your payments on time, and you can’t remember doing anything unusual to have caused such an action against you.

The management team at The Silkin Management Group attempts to watch these activities for its clients in order to offer logical advice. The great majority of Silkin Management Group’s clients are in the health care profession and, as such, their credit ratings are often vital to the operation of their business. Having good credit is vital in getting a lease or loan for new equipment, expanding an existing office or building or buying a new facility.

Unless you’ve been living the last year or so living in an endangered oak tree as a guerilla environmentalist, you are aware that the credit climate in the country has changed. This is not new news. However, it was only recently that FICO, the service most widely used to determine one’s credit-worthiness, has released information about how they arrive at the hallowed number. This is the first time they have opened their secret vault of formulas, calculations, and criteria to the great masses.

Also, Silkin Management Group is a leading vendor for several major lenders to the health care profession. As such we have extensive experience in this field and can help you with understanding this industry and activity as well as aid you in obtaining financing for business needs.

Part 2 of this article will be posted here on January 29th. In Part 2 I’ll go over some of the specifics I’ve found from FICO opening up their secret vault. You’ll find it useful, educational and hopefully helpful in being proactive with your credit rating.

If you’d like more information about Silkin Management Group and its services, visit our website at: www.silkinmanagementgroup.com. You can also email us at: info@silkinmanagementgroup.com

Lyn Ribisi
Appointment Coordinator,
Silkin Management Group