|
|||
NewCreditReport.Org |
|||
| Free Credit Report | Fico Scores | Credit Repair |
|
Credit Education is vital to the average consumer. A low credit rating can affect you in more ways than just money. At Credit Education World, we are here to provide free information to those seeking to improve their credit. We are especially concerned with those seeking to raise their fico score. If you would like to contribute to this site please email admin@NewCreditReport.Org |
||
What is a Fico Score?A Fico score is a three digit number that determines credit risk. The lowest scores are in the 500 range (even though you can theoretically get a score of 300) and the highest scores are in the 850 range (even though you can theoretically get a 900). Fico scores are based based on a proprietary calculation produced by Fair Isaac Corporation. The calculation is then provided to the credit bureaus.
Score Summary720-900 - Highest score range. Some creditors make the highest range 760-850. 700-719 – Excellent credit. Financing terms will be good. 675-699- Your credit is still good. You will be able to get somewhat favorable loan terms 620-675 – Your credit is fair. You can obtain credit, but you will pay extra for it. 560-619 – You will probably not get any credit. If you do get credit, turn it down because the terms will be unfavorable. 500-559 – Your credit needs an overhaul. Don't expect to get any credit. Since the score algorithmn is proprietary, nobody really knows what the score is based on . However, we know what most of the inputs to the formula are. We just don't know to the exact weight that each input carries. In addition, there may be minor variances from unknown inputs that absolutely nobody knows outside of Fair Isaac. Inputs: Rated In Descending Order (Items that hurt/help your credit the most down to items that affect your credit minimally).1- Public records have the biggest impact on your credit. If you have gone bankrupt, have judgements, or liens you will certainly have a low score. Public judgements should be avoided. In cases of disagreements, credit experts say to just pay the judgement or lien and then sue, if necessary. For most people, it is not worth the negative credit.2- Payment history is vital. It says you are responsible or not. Creditors don't like to wonder if they are going to get a payment. If you send in your payments every month, they don't worry because they know you are going to pay them. 3- Account balances: Are you maxed out or not. If you are using up all the credit you have, you are not a good credit risk. People that have problems with money always run up every bit of credit they get. A good sign of self control is someone that can keep their balances low. In addition, if you are close to maxed out it means you have less options to turn to if something goes wrong. 4- Account types: Good accounts come from credit unions, banks, and mortgage companies. Bad accounts come from finance companies. People that use finance companies are usually high risk people so anyone who uses finance companies get a lower score. 5- Number of Accounts: You shouldn't have more than 3-4 revolving accounts and credit cards. If you have too many accounts, a creditor thinks you may get in over your head. For example, if you had 45 credit cards with high credit limits and none were used you might think that you are a good credit risk. However, the creditor thinks about what would happen if you suddenly used all 45 cards and maxed them out in one month. You would be in over your head. Since creditors see that their risk is higher with your 45 accounts, they would lower your score. 6- Account Age: Accounts that have been established for a long time get you more points. Unstable people lose good accounts over time. The most stable people keep their good accounts for many years. If you have too many accounts, close the most recent accounts; not the oldest accounts. 7- Credit inquiries lower your score. If you are looking for credit all the time, it tells the credit bureaus you are are a bad risk. Maybe you are getting lots of denials because of poor credit or maybe you are maxed out and can't get any more credit. People with poor credit are alway looking to get a loan somewhere to buy something. People with good credit only get a loan occasionally for something they really need like a house or car. If you get inquiries occasionally, it won't affect your credit much. And, if the inquiries are very close together, they don't lower your score as much. For example, if you are getting a mortgage and check with five mortage companies, in a short time frame, the inquiries will take off less points than if you applied five different times every three months. 8- Length of credit history. The longer you have been using credit the higher your score.
|
|||
 |
|
|