The Factors Considered in the FICO Credit Scoring System

The Fair Isaac Co. created the FICO credit scoring model that the three major credit bureaus use to calculate the credit scores lenders use to determine a consumer's creditworthiness. Your credit score can impact many areas of your life, and understanding how it is calculated can help you build it up over time. Several factors go into calculating your FICO score. FICO Score Basics The FICO score is a numerical representation of the information that is contained in your credit report. Your credit report is filled with information provided...

Read More

Should I Cancel One of My Credit Cards to Improve My Credit Score?

A credit score is calculated by a mixture of factors. You may have heard that too many credit cards can lower your credit score. Canceling one of the credit card may seem like a simple solution. Unfortunately, canceling a card is not that simple. A canceled account can have a negative impact on your credit report. Consider Age The age of a credit card account is something to consider when canceling a credit card. Closing an older account...

Read More

Six Sneaky Factors That Affect Your FICO Score

Your FICO score can dictate the quality of certain aspects of your financial life. The Fair Isaac Corporation calculates a FICO credit score for borrowers based on several key credit management characteristics. While common advice for keeping a good FICO score includes paying down your debt and paying your bills on time, several "sneaky factors" affect the direction of your score, as well. Debt Utilization Ratio Obviously, lots of debt can have a negative impact on your FICO score. If, however, you manage that debt well, you might still...

Read More

How to Use Prepaid Credit Cards to Help Rebuild Credit

Whether through bankruptcy, foreclosure or other reasons, many people lose their good credit rating. Having a low credit score can make it hard to get a car or auto loan or a credit card. Though there are many options for rebuilding your credit, one fairly easy way is by using prepaid credit cards. This is an excellent way to rebuild your credit as well as retrain yourself to stick to a budget. Instructions 1 Look for a prepaid credit card provider that reports to the three credit reporting agencies: Equifax, TransUnion, and Experian. Be...

Read More

Fast Ways to Raise a Credit Score

Your credit score is what lenders look at to determine whether or not to let you borrow money. If one or more incidents in the past have caused your credit score to dip to unacceptable levels, it is possible to raise the score in a relatively short time. If the score is extremely low, it will take some patience to get the number back to where you want it to be, but following a few financial tips will get you on your way in a hurry. Resolve Old...

Read More

Tips for an Excellent Credit Rating

A credit rating affects many things in a person's life, such as a job offer, opportunities to rent an apartment or buy a house, and the rate a bank charges on a loan. There are three major companies that provide credit ratings in the United States, which are the firms Experian, Equifax and TransUnion. These companies do not provide the exact method that they use to create a credit score to consumers. An individual can still establish a high credit...

Read More

Does Poor Credit Drop Off After Seven Years?

Consumer credit reports provide a picture of an individual's financial well-being at a specific point in time. In order to give consumers a chance to improve their financial health, the Fair Credit Reporting Act (FCRA) stipulates that poor credit entries on a consumer credit report be removed after seven years, in some cases. Certain types of poor credit information may remain as part of a consumer credit report for significantly longer than seven years, depending on several variables. Credit Cards Original creditors, collection agencies...

Read More

Does a Deed-in-Lieu of Foreclosure on a Timeshare Affect Credit?

Some timeshares fall in value so much that the owner sells the property for nothing, and others may try to give the deed back to the developer -- called a deed-in-lieu of foreclosure. While a deed-in-lieu may get you out of a property, you may destroy your credit rating in the process. On the other hand, a deed-in-lieu can save your credit rating. Timeshare Mortgage A deed-in-lieu of foreclosure will affect your credit rating if you have a timeshare mortgage, because the lender -- often the timeshare developer -- usually reports to the...

Read More

Does Paid Mean Closed on a Credit Report?

A paid or closed account it usually a good thing on your credit report, or at least neutral. Whether you have a "paid in full" or "closed" status on your account makes little difference, according to credit reporting agency, Experian. Identification The only difference between paid and closed on a credit report is that they signify a different type of account,. "Paid" accounts are installments, such as loans, while "closed" accounts refer to revolving accounts, like credit cards. Significance A paid account means you have given back...

Read More

Will Merging Two Cards From the Same Company Affect the Credit Score?

Your credit score is a number summarizing the activity in your credit report; Any financial activity reported on the credit report affects your scores, including merging or combining cards. Even if you have two credit cards from the same company, each account appears separately on your credit report. The trick is to merge the cards in a way that preserves the positive attributes of each account. The financial advice service Bankrate reports that it is difficult to know exactly how many points any given action adds to or subtracts from to your score....

Read More

How to Make Your FICO Score Work for You

Fair Isaac is the company that came up with the original credit scoring model and it is still used today by all of the major credit bureaus. Your credit score is an important number as it can play a role in many areas of your financial life. Your insurance premiums, rental deposits and interest rates can be impacted by it. Getting your FICO score on an upward trend can significantly improve your financial life in the long-term. Instructions 1 Get a copy of your credit report from each of the three major credit bureaus. TransUnion, Experian...

Read More

Reliable Consumer Credit Advice

Everyone from friends to co-workers can offer advice on credit. However, improving a bad score and maintaining a high rating calls for adhering to reliable credit advice. There is plenty of information available. Do your own research to ensure that you're making the best credit decisions. Check All Three Credit Reports Every consumer has three credit reports and three credit scores. When applying for mortgage loans and home loans, lenders...

Read More

Equifax Credit Score Tips

Everywhere we turn, we seem to hearing about the importance of our credit score. You must increase your score in order to get a loan. Improving your credit score is possible, but you have to be responsible in your spending and wise in the financial decisions you make. Equifax is one of three credit reporting agencies that monitor your credit activity and give you a score based on your creditworthiness. Credit Score Your credit score is a reflection of the amount of risk that a lender or creditor takes upon himself by lending you money or...

Read More

How Are Credit Scores Used for Employment?

Credit card companies, mortgage lenders and banks all use credit scores to determine borrowers' likelihood to repay their debts. However, a bad credit score can also hurt a person's chances of finding a job, states MSN Money, a consumer finance website. Many companies run credit checks on applicants. Businesses use these credit data in many ways. Identity Verification Some companies that run credit checks on applicants do not place much, if any, weight on an applicant's credit score or past financial history. Instead, these corporations...

Read More

Who Is Experian Credit?

You've probably heard about the importance of checking your credit report and obtaining your credit score. Experian is one of the three main companies that compile and provide that information. About Experian Experian provides information about credit, analytical tools and marketing data to consumers and businesses to facilitate loan underwriting and other financially based decisions. Experian employs more than 15,500 people around the globe,...

Read More

What Time Is Required to Get a Problem Fixed on a Credit Score Report?

It might take several months before you see a change in your credit report after winning a dispute. In the most unusual dispute claims, fixing a problem can take years. You may be able speed up this process if you agree to pay a fee, because a lower credit score can mean thousands more in interest charges. Preparing a Dispute Most disputes take the consumer about four hours to prepare. You will need to pull your own credit report, gather documents to prove a claim, write a letter to the bureaus identifying the disputed item and mailing...

Read More

How to Dispute Trans Union Reports Online

Inaccurate information on your credit report can adversely affect your credit score. Every person is allowed a free copy of their three credit reports every year. Because credit reporting agencies can have typos and clerical errors, careful inspection of your credit report is necessary to maintain a good credit score. Individuals with negative information on their credit report will want to take an extra close look. There are limitations...

Read More

How to Obtain Free Credit Rating Scores

Your credit worthiness needn't be a mystery to you --- and thanks to the Fair Credit Reporting Act, it is your right as a consumer to have access to the important information on your credit report. Your credit report won't show your actual score unless you pay for it, but you can obtain the information that determines your score for free annually. Instructions 1 Go to annualcreditreport.com to order your free report online. You'll be asked...

Read More

Deed in Lieu of Credit History

While a deed in lieu of has less of a damaging impact on your credit score than foreclosure, it is still horrible for any credit report. However, a deed in lieu is one of the fastest and cheapest ways to get rid of a home you cannot afford or sell. Before you make any decision, research all options, especially if you want to save your credit rating. Identification A deed in lieu involves you voluntarily relinquishing possession of your home to your lender. In general, a deed in lieu is as bad as foreclosure or a short sale to lenders. As...

Read More

By How Many Points Does a Short Sale Affect Credit?

A short sale may save you from the added expenses of a foreclosure, but it probably won't save your credit score. In a short sale, the bank agrees to let you sell the house for whatever you can get and then call off the mortgage. Because most short sales do not pay off the entire mortgage, the agencies will report the debt as delinquent. Identification Like any item on a credit report, a short sale has an unpredictable effect on any borrower's credit score, because the FICO scoring formula is a secret. With what is known about the FICO...

Read More

How to Quickly Fix Your Credit Score

As soon as you apply for your first credit card, you start to build a credit history. Every time you apply for a new account, make a payment or cancel an open account, the financial institution reports this information to the credit reporting bureaus that collect a file on your history. Missing a few payments or defaulting on a loan will damage your credit score. However, you can take steps to get back on track and improve your rating. Instructions...

Read More

Credit Audit Checklist

It's always a good idea to audit your credit reports before applying for credit. By looking over your credit reports you'll see the same information your potential creditors will be reviewing. Seeing the information first will give you a chance to correct errors or make other moves to improve your credit score before applying. Free copies of your credit reports are available from the website Annual Credit Report (see Resources, below). The three...

Read More

What Is the Credit Score Scale?

Within the credit world, your credit score is invaluable. Before a lender will issue you credit of any sort, they refer to your credit history to determine your credit score. The higher your credit score is, the better your interest rates and loan amount will be. Credit scores are on a scale from about 330 to 850. Each lender will determine what your number means; however, generally credit scores fall into the following ranges. Bad Credit scores below about 579 are considered extremely high risk. Bankruptcies, poor payment history, foreclosures...

Read More

What Is the Best Credit You Can Have?

Obtaining the perfect credit score may be impossible for most people, but you need much less than a perfect score to get all of the same benefits. Going for perfect credit is really an effort in futility and doesn't offer much more than bragging rights. This doesn't mean, however, that you should slack off on trying to boost your score. Identification The FICO scoring scale goes from 300 to 850. Other scoring systems may use a different range. The VantageScore model, for instance, tops out at 900. In the FICO system, an 850 is only theoretically...

Read More

Can I Improve My Credit Score With Paying Purchases Off?

When you apply for new loan, the lender typically reviews your credit report and score to determine if you qualify for a new account. If your credit score is low, you may have trouble obtaining loans. To improve your credit score, consider paying off some of your debts. About Credit Scores A credit score is a number that credit providers use to evaluate your creditworthiness. To obtain your credit score, lenders make inquiries with credit...

Read More

How Much Will Paying Off a Debt Collection Affect Your Credit Score?

Prior to 2008, paying off a collection account transformed the old account into a new one, which significantly impacted your score. The scoring model, however, changed in 2008; your score no longer decreases when you pay off a collection account and the activity date on the account becomes the date the debt was paid off. Wether paying off the collection account will raise your credit score and how much depends on a number of other factors on your credit report. The scoring model is proprietary information and how a certain item impacts the scoring...

Read More

What Measures Debt & Paying Ability?

Your ability to secure credit and successfully manage your debt is one of the most important aspects of your life, both financial and otherwise. Your credit management is tracked by your credit report and credit score, which are also used by creditors to evaluate your level of risk when you apply for credit. Credit Score Your credit score is a snapshot of how well you manage your credit based finances. Credit scores numerically express the information found in your credit report, which shows your entire credit history. These two pieces...

Read More

The Best Credit Repair Advice

It's smart to repair your credit if you plan on buying a home or financing a car. Credit repair doesn't happen overnight. But with a plan and consistently good credit choices, you can raise your low score. The benefits of a good credit rating include quick loan approvals and lower interest rates on loans. Bill Payments Repairing credit and maintaining a good credit rating involves more than paying your creditors and lenders on time. Paying utilities such as electric, rent and cell phone bills also plays a role in good credit. These creditors...

Read More

How Do You Remove Child Support From Your Credit Report?

Having kids is a wonderful experience. Failure to pay child support, on the other hand, can be a costly mistake. Collection agencies can report late payments to the credit bureau; such derogatory marks have the potential to lower your FICO score. According to Fair Isaac Corporation, the company that invented the FICO scoring model, the way you pay your bills accounts for 35 percent of your overall score. Fortunately, negative items on a credit report...

Read More

How to Get Your 3 Credit Reports

The federal government mandates that the credit bureaus--Experian, Equifax and TransUnion--allow consumers to check their credit report once per year free of charge. Your credit report contains information about how you have handled debt such as credit cards, auto loans and mortgages. Check your credit report annually to make sure the information on the report is correct. You can access your free credit report from each of the three credit bureaus online, over the phone or through the mail. Instructions 1 Open the Annual Credit Report website...

Read More

How to Select a Credit Monitoring Service

The three national consumer credit-reporting bureaus in the country are Experian, Equifax and TransUnion. Each offers credit monitoring products and services. For example, Experian's Triple Advantage Credit Monitoring service gives you regular access to all three of your credit reports and scores. When choosing a credit monitoring service, read the terms of each product and educate yourself on how the credit monitoring service works. Instructions 1 Compare product offers. For example, if you wish to receive email notification whenever changes...

Read More

How Long Does Bad Credit Stay on Your Credit Report?

Bad credit stays on a credit report for an average of seven years. Negative marks may stay on a report for a longer or shorter, depending on the statute of limitations in your state and the type of transaction involved. Depending on a credit reporting agency's policy, positive credit may stay on a report indefinitely or for as long as an account remains open. Bankruptcy A bankruptcy may stay on a person's credit report for 10 years. Credit reporting agencies may remove Chapter 11 and Chapter 13 bankruptcy reports after seven years; these...

Read More

How to Reinstate My Credit After Bankruptcy

Credit ratings take a major hit after a bankruptcy, and reinstating your credit or getting back on the right track requires quick action and better credit habits. There are numerous ways to reestablish your credit history after bankruptcy and build a good rating. The key is knowing where to look for credit and adopting habits that are sure to boost your low score. Instructions 1 Use secured credit cards to help you bounce back and restore a low credit rating. Apply for a secured credit card and set up a savings account with your bank or...

Read More

How Can I Tell What My Credit Score Is?

Your credit score is a numerical representation of the credit risk you pose to lenders. The higher the score, the less risk that you will default on a loan. Lenders use your credit score in conjunction with your credit report to determine whether to give you a loan. Your credit score also determines your interest rate; people with high scores typically get lower interest rates because lenders consider them more credit-worthy. Fair Isaac Corporation...

Read More

Can You Rent an Apartment If You Owe Another One on Your Credit Report?

When looking for an apartment, the worst thing you can have in your credit history is an unpaid bill from a previous apartment. Owing on a previous apartment doesn't preclude you from renting a new one. However, delinquent rent probably reduces your options for a new place, or you may have to pay more for an apartment. Identification Nothing stops a landlord from renting to you under any circumstance, even when you owe money on a previous apartment. For practical reasons, a landlord probably wouldn't rent to you with a delinquent lease...

Read More