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Less than 6% of the population in the United States can brag about having FICO credit scores above 800.
It's an elite club.
The benefit of having a score above 800 is that you're guaranteed credit approval with the best terms from the best lenders. No hassles. Only the red carpet treatment.
But do you really need to have FICO credit scores that are 800 or higher to accomplish your goals? I don't think so. Any score over 740 is worthy of celebration.
You may have scores in the high 500's or low 600's, and you may think "740, yeah right!" But if you follow the steps I'm about to outline, you will see your scores approach 740 and you will become much more attractive to lenders.
So how do you go about building your FICO scores to 740?
I can't tell you specifically, because I don't know what your negative reason codes are. You see, the secret to increasing your FICO credit scores is for you to understand your negative reason codes.
Negative reason codes are a boring topic to people with good credit.
But to people that had credit challenges in the past, it can mean the difference between continuing to be denied credit or hearing those wonderful words, "You're approved."
Your negative reason codes are the keys to unlock credit doors that up until now have been slammed in your face.
The great thing about negative reason codes is there is no guesswork involved. Your negative reason codes will tell you everything you need to do to accomplish your goals of buying that new car you always wanted or getting approved for that mortgage with a single digit interest rate and no money down.
By understanding and acting on your negative reason codes lenders will no longer treat you like a second-class citizen. No more "special finance" departments. No more high-interest finance companies. You can look for an apartment or begin house shopping with confidence.
Powerful stuff. And it's easier than you think.
First of all, negative reason codes are two digit numbers that accompany each of your credit scores.
When you purchase your FICO scores you should automatically receive four negative reason codes for each score (from each credit reporting agency), giving you a total of twelve codes.
...as long as you purchase your scores and codes through the right source.
The best place to purchase your scores and twelve negative reason codes is NOT myfico.com. You don't receive all twelve negative reason codes from myfico.com.
Technically, you receive four negative reason codes and eight "positive" reason codes. Unfortunately the positive reason codes are absolutely no help to someone with low credit scores.
I was so frustrated that Fair Isaac didn't give all twelve negative reason codes that I begged Fair Isaac to make the real negative reason codes available to the public. So after several months of me prodding them, they finally gave in and created myfico/12.com for us. Through this site you get everything lenders see! Cool.
Mortgage lenders are another good source to get your scores and negative reason codes when you apply for a mortgage. Just be sure your mortgage company follows the new FACT Act and shares your scores and codes with you. It's mandatory now.
Alright. So now you know what negative reason codes are and how to get them.
How do you know what these codes mean?
The definition of each code is explained with your credit scores.
For instance, a negative reason code "38" will be defined as: "serious delinquency, and derogatory public record or collection filed." A negative reason code "08" is defined as: "too many inquiries last 12 months." So your negative reason codes tell you exactly why your scores aren't higher.
Unfortunately, the definitions provided by the credit reporting agencies are not as detailed as I would like. That's because they were designed to help lenders explain why you were declined...not designed to be shared with consumers.
This should help.
I was fed up with how difficult it was to decipher negative reason codes. (Boy, I'm fed up a lot, aren't I?) So one day I sat down and read every single reason code, then rewrote it in plain English so I could understand it!
Imagine how much easier it would be for you to understand your negative reason codes if you had this plain English translation for yourself?
Now you know all the negative reason codes...in plain English.
Joining the 740+ Club is easy when you have a goal and a clear game plan to make it happen based on your negative reason codes.
Your negative reason codes are the critical keys to unlock credit doors that up until now have been slammed in your face.
I have good news for you. You can get your own free copy of the Negative Reason Code Decoder Report now by going to:
http://www.lifeafterbankruptcy.com/links/CodeReport.pdf
Stephen Snyder is the founder of the After Bankruptcy Foundation a non-profit organization that provides free bankruptcy recovery information. He is also an expert on credit scoring and helping people improve credit scores.
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