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Credit The Good, The Bad and the Ugly


The one thing that I have learned about credit is from the work that I do, and it is all factored on who you are and when you pay your bills. So there are basically six categories of people and how they pay their bills.

  1. The first is the person with an elite credit score. He has a 700 to 800 credit score he manages his bills like a science.  He keeps a list of what is spent, when he spent it and why he spent. They also qualify for the best interest rate and the best programs.
  2. This is the 2nd tier group they have a credit score between 650 to 700 credit score. They pay there bills like clock work. Even though the second tier credit group pays his bills like the tier one group, they have a little more debt and how its managed determines why there credit score is lower. They live to be ahead of the curve but in some cases they may be late sending in a payment sometimes.
  3. The 3rd tier group is some what deceiving because the score is lower 600 to 575 but they can buy anything they want like the 1st tier group. The difference with this group is they are extended on credit cards and there bills. They help there son, daughter, sister and brother and on paper you wonder how are they making the payments. The reality of the 3rd tier group is they can qualify to buy anything but the interest rate that they qualify for is the 7 to 9% interest rate. So regardless of there intent to pay off the bills, they tend to live extended.
  4. The 4th tier group is the group with good intentions but Murphy Law is always lurking close by. Their credit score is 570 to 540, and they can buy but it always falls to a last minute discussion before the final approval is given. This person as priority set in there ind on how they will pay the bill when they are getting credit but forgets when its time to pay the bill of the credit priority that they said. So as they look at life they are always living for the moment. They credit card is over almost to the limit and they are one moment away from disaster.
  5. example of bad credit
  6. The 5th tier group is the ones that don’t pay anyone. They scores are 535 to 400. They start with the great intention when they get the cell phone, credit card or car. Yet they never seem to hold up there obligation. When you look at there credit report you see charge off, collections and alot of petty bills that they never pay. So here is something that you have to remember with the 5th tier of people, there children usually have good credit???
  7. The 6th tier group is the people who buy everything with cash and they will have no credit score.We call those people ghost because they don’t really exist.

So the number#1 question that I have about credit, that consumers ask me is “how can I improve my credit score”? So if you want to make your credit score rise, and make significant leaps. You need to live like this, first never let your credit card balance go over 45% half of your max credit. An example (your credit limit is $1,000) so you never want your balance to go over $450 dollars. If you don’t have a credit card, get one! Number #2 is use your credit card to buy your gas and at the end of the month pay the balance down to just a few dollars. (REMEMBER CREDIT IS BASED ON YOUR ABILITY TO STAY IN DEBT AND CONTINUE TO PAY YOUR BILLS ON TIME) One thing you must consider is that if you payoff a car loan or mortgage your credit score will drop. Not a drastic drop but a possibility of 50 to 80 points.
One of the ugly things in life if you are late on your payments as indicated below it effects your credit scores and it will gradually drop your score.

Think of your credit like stairs you have to put effort to climb to the top, although when you are going down its always easier to go down than to climb.

This Legend is one of the factors that help determine what your credit score will be.


The big three in credit is Experian, Transunion and Equifax. These are credit reporting agency that tell you what your credit score is. So many people think that credit is the ability to stay out of debt. In reality credit is the ability to stay in debt and pay your bills on time.

This is not a science of credit, but just my interpretation based on my experience in the mortgage world. If you are trying to repair 

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