How Are FICO Scores Used?

A high FICO score indicates that you have healthy card balances and a low debt-to-income ratio, which compares the amount of money you owe in monthly debt payments to your take-home pay. Your FICO score changes as the information in your consumer credit report changes. Function Lenders, creditors, service providers, utility companies and employers use your FICO credit score to determine your creditworthiness and to qualify you for new lines...

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How to Build a New Credit File

Building a new credit file takes time and effort. Information on your credit report cannot be erased unless the information is inaccurate which means it will take work and effort on your part to ensure every single item that is reported in your credit file from this day forward is positive and will add to building a new credit file that is positive and better than what is showing currently. Instructions Remove Inaccurate Entries 1 Review a...

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What Are the Benefits of Credit Scoring?

Nearly everyone who has ever taken out credit has been assigned a credit score -- a number representing an estimate of the probability an individual will pay back a loan. These credit scores are issued by credit bureaus, also called credit reporting agencies, which gather information about an individual's borrowing habits and use it to calculate his credit score. This practice of credit scoring has a number of advantages to both lenders and borrowers. Availability One of the main advantages of credit scores is that it makes a large amount...

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How to Repair Very Weak Credit

Poor financial decisions can take its toll on your credit score. Unfortunately, many people do not realize the financial toll that bad credit can take until they are trying to make a large or significant purchase. However, over time, with careful money management, you can repair your credit. Instructions 1 Contact Equifax, TransUnion, and Experian for a copy of your credit report. You are allowed one free copy of your credit report per year....

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Is There a Legitimate Way to Improve a Bad Credit Score?

Your credit score affects whether you get loans and how much interest you will be charged for them. If you have a good credit score, you can get loans at lower interest rates. If your credit score needs work, the bad news is that there are no quick and easy fixes. The good news is that your credit score can be improved over time. By taking steps to improve your credit history, your credit score will improve because newer information counts more heavily than past records, and most negative information falls off your credit report in seven years....

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Why Are Different Credit Web Sites Giving Me Different Credit Scores?

Financial experts frequently recommend that consumers take the time to run their credit history each year to make sure information is correct, current and that identity thieves have not opened fraudulent accounts under their name or Social Security number. If you've accessed more than one credit website, you may have noticed that you've received different credit scores. This may not be cause for concern. Understanding why different credit websites...

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Best Ways to Rebuild Credit After a Bankruptcy

Filing bankruptcy and going through the process is a stressful period that often ends with a lower credit rating. For the next ten years, any lender who reviews your credit file will take note of the bankruptcy, which may prompt them to deny your request for credit. However, even with a bankruptcy, some lenders will overlook this mishap and be willing to extend credit to you. The key is rebuilding your credit history after a bankruptcy and raising...

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About Free Credit Reports

Free credit reports are available to every consumer with a social security number, on an annual basis. Law requires each of the three main credit bureaus, Equifax, Experian and Transunion, to furnish each person his report once per 12-month period. You still have to pay a fee to see your credit score, but you can download your three free credit reports from any computer, free of charge. History of It used to be that consumers had to be denied...

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How to Write a Letter of Dispute to the Credit Bureau

Credit reports are no longer a mystery due to free annual access to your report from each of the reporting bureaus. It's possible to review the details of the information in the credit report and investigate any errors. By checking for errors and disputing them in a timely manner, you can keep your credit reports up-to-date and avoid embarrassing problems when potential creditors check your rating. Instructions 1 Review the paper copy of the credit report and neatly mark the disputed items. Number multiple items for reference in the correspondence....

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How to Take a Judgment Off Your Credit File

You never want an incorrect, incomplete or expired judgment to remain on your credit file. Such reports are negative and can adversely affect your credit file and credit score. The Fair Credit Reporting Act protects consumers from incorrect reports and allows you to dispute old and incorrect judgments. In most cases, you can have eligible judgments removed from your credit file in as soon as 30 days from the date you first report the judgment to the credit bureaus. Instructions 1 Order your free annual credit report. Annual Credit Report's...

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Fair Credit Reporting Act Guidelines

The Fair Credit Reporting Act (FCRA) was established to protect consumers from misuse of their credit reports. Because your credit information is used to make decisions, from whether or not a landlord will rent you a home, to the limit on your credit cards, the Federal Trade Commission set forth guidelines for consumer reporting agencies. As a consumer, it's vital to understand your rights to protect yourself down the road. Information Used Against...

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Does a Mortgage Forebearance Affect My Credit Score?

Successfully negotiating with your lender to defer or forebear payments for a few months might prevent the creditor from foreclosing on the home, but it could cause significant damage to your credit score. Even if the lender reports your account as current during the forbearance, it is the lead up to the mortgage modification that can cause the most damage. Considerations Whether a mortgage forbearance affects your credit score could go either way -- it all depends on what the lender reports to the credit bureaus. Some lenders may agree...

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How to Improve Credit Fast With Tradelines

Consumers can have a difficult time understanding the internal mechanics of credit reports. Many people assume that credit scores are stable and do not fluctuate unless major events such as large purchases or delinquencies occur. However, credit scores fluctuate in a major way on almost a daily basis. Knowing the secrets about how credit scores work and how to improve suffering scores with seasoned trade lines can help consumers get better terms, interest rates and qualifying ratios for any type of loan or line of credit. Instructions 1 ...

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How Much Does an Inquiry Lower My Credit Score?

Whenever a person or company pulls your credit report, this is listed on the report as an inquiry. Some inquiries lower your credit score, but others do not affect it at all. Types The only type of credit inquiry that lowers your credit score is one generated in response to your application for credit. Credit scoring models do not factor in other inquiries, such as pre-approved offers of credit, inquiries you make on your own report and credit checks by organizations, such as employers and insurance companies. Effects According to...

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How to Raise a Credit Score of 600

Having a credit score of 600 puts you at risk of getting high interest rates on any loans you apply for. You should raise your credit score to at least 620, though anything over 700 is preferable. Once your credit score is above 700, you begin to qualify for lower interest rates and better loan agreements. You will also qualify for more credit at most financial institutions. The steps to raising your credit score are simply, but they involve discipline...

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How Much Will It Affect My Credit by Getting a New Credit Card?

Although finance experts tell consumers that they need to use credit to build a credit rating, a new credit card almost always damages a FICO credit score in the short-term. Also, the consumer has to use the new credit responsibly or the account can ultimately become a liability. The borrower should only take out an account if he can pay it off every month. Identification Because a new credit card affects almost every variable in the FICO credit scoring system, nobody can give a definite number of points the consumer may lose or gain. In...

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List of Credit Building Solutions

There isn't just one method to building credit. A credit history and a good score allow you to get low interest rates on financing deals, and people with an excellent history of managing credit can normally qualify for mortgages with no issues. Consider different techniques to help you build credit and keep a good credit rating. Secured Credit Cards Applying for your first credit account with a major brand such as Discover, Visa or American Express can end with disappointment if you receive a rejection letter. Acquiring credit is essential...

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Tips to Improve Credit Rating

Keeping a high credit rating is an ongoing effort and one credit mishap can cause your score to fall, wherein it becomes difficult for you to get a mortgage or vehicle loan. Fixing a low credit score and maintaining a rating 700 or higher is doable. Don't expect overnight success, but by employing good credit habits, you'll eventually achieve a higher rating. Get a Free Credit Report Make a habit of checking your personal credit history a...

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Does Becoming Debt Free Affect Your Credit Score?

The amount of debt you carry plays is a major factor in your credit score. Your debt shows potential lenders how well you manage the credit you have and how close to the edge you are living financially. Becoming debt free can dramatically increase your credit score, but just how much your score might soar depends on other aspects of your credit history. Debt and Your Credit Score Your credit score is determined by evaluating five different...

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Does It Affect Your Credit if the Bank Forecloses on Your Property?

Your bank reports all of your payment history and account data on your mortgage to credit bureaus, which then use this data to help calculate your credit score. When the bank forecloses on your property because you cannot pay the mortgage, the bank will report this to the credit bureaus as well. Foreclosure significantly lowers your credit score. Initial Effects As soon as the bank reports the foreclosure, you will see your credit score drop anywhere from 85 to 160 points, according to FICO, which computes and publishes credit scores. This...

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How to Get a Good Loan With Bad Credit

A person is typically classified as having bad credit when their FICO score is 580 or below. This will usually place people in a sticky situation when trying to obtain a good loan, which is a loan that has favorable interest rates, terms and conditions. High interest rates and other unexpected fees are typical for poor credit borrowers, while lower interest rates and lower fees are afforded to good credit borrowers. There are a few steps you can take to help obtain the best loan possible, even with a less-than-desirable credit score. Instructions...

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What Happens If You Are an Identity-Theft Victim?

Notify Credit Agencies If you have been the victim of identity theft, immediately report the theft to all three credit-reporting agencies, including: Equifax at (888) 766-0008; Experian at www.experian.com/fraud; and Trans Union at fvad@transunion.com. The agencies do not share the information with each other, so be sure to contact all three. The agencies will each send you a packet of information about identity-theft victim's rights. You will need to call each agency and request that your account be put on fraud alert for seven years, and...

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Does Checking Your Credit Report Lower Your Score?

The Fair Credit Reporting Act allows consumers to check their credit reports once every year for free, according to the Federal Trade Commission. Those copies must be obtained from annualcreditreport.com. People can purchase additional copies as frequently as they wish from TransUnion, Experian and Equifax, which are the three nationwide credit bureaus, or third-party vendors. Certain credit report inquiries are reflected in the credit score, but personal credit checks are viewed differently. Purpose The Federal Trade Commission recommends...

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Does it Help Your Credit Score to Have Utility Bills in Your Name?

Utilities require monthly payments, much like loans, but it is unlikely utility payments will help you build credit. On the contrary, for most people, utilities on a credit report represent a negative item. Putting utilities in your name, however, could help you prove your integrity and responsibility to some lenders. Identification In most states, privacy laws prevent utility companies from reporting payment information to the credit bureaus, and that includes positive payment history, according to Payments Source. In the few states that...

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Unsecured Credit Definition

Credit accounts involve borrowing money, but many consumers do not realize there are actually two different account types: secured and unsecured. You have unsecured credit if you are one of the 176.8 million Americans who had a credit card as of 2008, according to the Federal Reserve Bank of Boston, or if you are repaying a personal loan. Unsecured credit is beneficial in many ways, but it also carries certain risks for lenders that can make it difficult...

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Checking Account & Credit History

You could bounce checks all over town and it might not affect your credit, even if it is a crime. However, checking accounts often affect your credit history, mostly depending on what the bank decides to do with overdrawn accounts. In general, you should use checking accounts responsibly, because they may be important to getting a loan even if they do not affect your credit history. Identification Banking accounts can hurt your credit when the financial institution requires a hard inquiry into your credit history before approving the account....

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How to Remove From a Credit Report Bounced Checks Added to a Bankruptcy

When you declare bankruptcy, every account included in the bankruptcy, including those related to bad checks, appears on your credit report -- in this way, filing bankruptcy won't make your credit report any better. Information related to bankruptcies can appear for seven to 10 years, depending on which type of bankruptcy you file. You cannot completely eliminate this information during this period, but you can change how it appears on the report...

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How Can I Get My Credit Score Up From 426?

A credit score in the low-400s is quite low, especially considering that credit scores range from 300 to 850. A score of 426 can be financially crippling; even if able to obtain financing, one would be subject to the highest of interest rates. Financial overload, unemployment, medical bills--all of these things can ruin a credit score. Nevertheless, a low credit score is not permanent. With hard work and discipline, it's plausible for someone with an extremely low credit score to turn the tables. Instructions 1 Request your free annual copy...

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How Does Applying for Credit Affect Your Credit Score?

Inquiries Applying for credit--whether a loan or a credit, or some other form of credit--does not itself affect your credit score. However, the application leads to official "inquiries," which can affect a credit score depending on quantity and frequency. There are generally two types of credit inquiries: soft and hard. Soft inquiries are not initiated by you, and do not affect your score at all. These are simply inquiries made by outside businesses that are looking to sell a product or service to people, usually credit-oriented. If your...

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