Using the Credit Assessment Calculator
Good credit is largely a matter of keeping your nose clean. If you make your loan payments on time and avoid foreclosure or bankruptcy, good credit will usually follow. A few late payments, though, and your credit will immediately take a hit – and the longer a payment is overdue, the worse the impact on your credit.
The Credit Assessment Calculator looks at how many late payments you've had on your various loans over the past two years and how far behind you fell. Credit rating agencies rank late payments in three categories: if they are 30, 60 or 90 days overdue. The calculator asks you how many you've had of each for your various types of loans in the past two years.
Note that simply being a few days overdue is not considered a late payment for credit purposes. You can miss your due date on your mortgage or credit card and be charged a late fee, but it won't be considered "late" for credit purposes unless you've failed to pay it by your next due date – at which point it is considered 30 days late.
A single 30-day missed payment will ding your credit a bit, but let it stretch to 90 days – known as a serious delinquency – and your credit will take a major hit. Likewise, accumulating multiple 30-day delinquencies can significantly dock your score.
Another thing that can seriously hurt your credit is foreclosures, bankruptcies or debts referred to collection. Any of these will be a huge hit on your credit. However, the impact begins to diminish after about two years and in most cases completely falls off your credit after seven – so the calculator has separate entries for 0-2 years and 3-7 years for bankruptcies or foreclosures.
In fact, virtually all blemishes on your credit fall off your record after seven years – even foreclosures – although certain types of bankruptcies stay on your credit for up to 10.
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Credit Assessment Calculator Overview
Having good credit is important for obtaining a mortgage, credit card or any other type of loan. You'll find more lenders and credit card companies are willing to work with you when you have good credit. Good credit also helps you get the lowest mortgage rates and interest rates on loans in general.
But many people don't know what their credit is. You can obtain your credit score from one of the three major credit reporting agencies – Experian, Equifax or Transunion – but you often need to pay to do so, particularly if you want your FICO score, which is the most common type used.
These days, many credit card companies and other lenders provide you with an updated credit score as part of your monthly billing statement. But that doesn't help you if you don't have one of those cards.
This Credit Assessment Calculator will allow you to get a good idea of where your credit stands. Not only that, but you can use it to see what affects your credit and how much, and the types of things you need to avoid in order to protect your credit.