What is your credit score?
A credit score or number indicates to lenders how likey you are to repay or default on a loan.
The program used to generate this number is very complex. The bureaus use secret calculating techniques to reach these numbers. There are various formulas used. Basically put, your information is entered into a computer. The program calculates the data information stored by the 3 bureaus , it then produces a number, Your FICO score or Credit score.
One of the biggest problems with the information used is that over 79% of all credit reports contain inaccurate information. This will then effect the actual FICO number. It is imperative that you keep track of the information found on the credit reports and correct any information that is not correct. You may be suffering just because of inaccurate information.
To get the best interest rates your goal should be to have a rating of 720 or higher. By having this rating you can do things like refinance your mortgage at a lower rate, car loans can be obtained at a lower interest rate. You can literally save thousands of dollars monthly, lower down payments for utility deposits, and even have a better opportunity for obtaining certain jobs, (Government Jobs for example).
The FICO range is 300-850
Excellent – over 750
Very good – 720-750
Good / ok 660-720
Could be risky 620-660
RISKY below 620
There are several calculations used for obtaining the FICO number.
- 35% is calculated based on payment history. Lenders want to know what type of risk you may be. They want to make sure that you can pay your bills on time, based on your past history.
- 30% is calculated by the amount that you owe. Debt to Credit Ratio (DTCR) is determined by the total available credit divided by the total debt. It is important to try to keep your credit limit to about 30% of the maximum credit allowed.
Total credit avail =$2000.00 / total debt $500.00 = 25 %. - 15% is calculated by the by the length of time that you have had the credit. The longer the credit history the better. This factor determines how you have spent over a period of time and how well you paid the debt back.
- 10% is calculated by the number of new account or nquiries that you have. Inquiries can be looked at as if you wanted all the new debt. That you may be setting yourself up to failure to pay your debt. Also, new accounts do not show enough history, there is no proven payment history to make a determination if you are worthy of good payment.
- 10% is calculated by the “mix” of credit that you have. The “mix shows that you can handle and manage multiple accounts responsibly.
Other things that are added to the equation of a FICO score:
- They looks for things like stability in your living situation, moving frequently may lower your score.
Owning a home may increase you score. Paying your mortgage on time is the most important thing. Do not max out your credit cards. Keep them at least below 50% of the maximum balance allowed, preferably 30%. Limit the amount of cards that you have open. 2-3 is a safe point. More than that may lower you score. Pay your monthly payments on time.
What can happen if you have negative items on your credit report.
Companies can charge you higher interest rates. The higher you are as a risk the more money they can charge,and the more they make. Having a low credit score can also prevent you from getting hired for a job.
Remember “the credit bureau is not your friend”. They work hand in hand with mortgage companies, car loan companies, insurance companies etc. The more interest you pay the more money these companies make. Bottom line.
If you have experienced poor credit there are ways to remedy this. You could hire a credit restoration company. However, just remember to do your homework. There are a lot of companies out there that make claims about doing credit repair and only do what you can do yourself for free. See www.FTC.com. Like sending dispute letters etc. You should find a company that has ties with a law firm or attorneys in their organization. They should have some type of money back guarantee to protect thier clients investment. They should be available to answer your questions. They should be legal, moral, and ethical.
If you find yourself in credit hell give us a call 888-476-1220 or visit our website www.USACreditCure.com for more information. “Helping America one client at a time”
Watch the video related to credit score
Here’s the second edition of my Battle Adagio video. I have added the credit roll and ending. Also, the framerate has improved drastically. Featuring Bryan Tyler’s amazing score, this scene is the last scene of the new Rambo film. Credit due to Lionsgate and Maple Pictures. THIS VIDEO CONTAINS A MAJOR SPOILER (it’s the end of the movie). Better seen in High-Quality full-screen.
Help answer the question about credit score
What are the cheapest reliable credit score companies?What are the cheapest reliable credit score companies where I Can get that efficient credit score that I need? I need to know what my credit score is so I can start looking for an apartment. And I know it must be bad, but I just want to make sure that it isn't tooooo horrible.
Thanks.
If we are to make progress we must make the connection between the underlying law of nature and the subject of this interview.
The people that created these issues will not be the ones to fix them.
no your credit wont' go up that high in 2 years and it don't need to. once you get in the 740 range you are elite anyway so theres not much difference between 850 and 740. The way you are going about it, I don't think it's going to increase much and all depending on the way your credit is reported to the unions it may appear on your fico score you are always at a $0.00 revolving balance therefore it has nothing to base good payments on.
To go from 558 to 700 will take several months of good hard credit management.
Pay your credit cards down to under 30% of your limit and keep them there.
Use them for every day things, never exceed 30% of your limit and always pay in full before the due date.
I did this with 2 credit cards and raised my score over 150-points in 12-months.
Your talking about your debt to credit ratio which makes up 30% of your overall score.
If your balance is really low and your new credit limit reflects no more then 30% usage, your score will not be affected.
If however your new limit makes your debt to credit ratio over 30% your score will take a hit.
There is nothing wrong with having a high limit as a matter of fact it's good since it makes it hard to exceed 30%.
It's not the credit you have that matters it's how you manage it that counts.
Here are a couple of things you can do to raise your credit score quickly.
1) Have a relative with great credit add you to their credit card account. This can raise your score over 100 points instantly, and has not risk to them! Even though your relative can add your name to their credit card account, they don't have risk if they don't give you a credit card.
2) Use your credit cards for monthly purchase, then pay balance down to zero every month. If you have the cash, this is a very quick way to raise your credit score. Remember, creditors cannot "see" your income from the credit report, but they can tell you have financial strength when you pay down your card balances every month. This technique can raise your credit score up to 80 points.
3) Use time. Most people don't realize that a bad credit item has the most weight only in the first two months, then hurts your score even less after 6 months, and even less after 2 years. After 2 years, many bad credit items don't even hurt at all. I know a friend with 6 chargeoffs that are 4-6 years old and her credit score is 620, good enough to buy a house. Sometimes waiting even a month or two for a bad item to age is all you need for your credit score to bounce back.
It doesn't mean you are a bad person when you have a lower credit score. Bad things just happen. Good luck with your credit score!
I wouldn't recommend getting a loan off the internet. If your bank won't finance you for a loan, then you're just going to have to do what I know you don't want to hear. Try to pay the things you currently have off before adding to your debt.
You don't need an installment loan. More often than not, they pull you DOWN. Who told you that?
This is a tricky question given the information because different financial institutions score different characteristics on credit bureau reports (CBR's) differently. For instance, a mortgage company would probably weight prior mortgage history more strongly than anything else in the score, auto-finance company weight auto payment history the strongest, etc.
Generally speaking, revolving credit lines and how they are paid are arguably the best indicator of how someone will pay any other type of credit line/loan. If these are the only 2 items reporting on your CBR's currently, it would be a better idea to use one or both cards moderately and pay the balances off monthly (or keep low balances and don't ever let them approach the high credit limits) to show responsibility in paying your credit lines. This will also help your 2 creditors raise your credit lines.
How does raising your credit limits help? One of the stock, built-in formulas affecting basic credit scores (provided by the credit reporting agencies, themselves) is the ratio of outstanding credit balances (all added together) versus the sum of high credit limits. If this ratio gets out of hand (i.e. all credit cards are approaching being maxed out or are over their limits) your score will definitely suffer severely.
Other factors are any collection accounts, bankruptcy(ies), repossession(s), or anything else derogatory (payments late in excess of 30 days+). I hope this helps.
P.S. If you are rich, I wouldn't really worry about it!
No. The ONLY way to help score a lot is if you request in writing that they promise to remove all mention of the debt from your credit report upon you making payment. Once they remove this (get it in writing, fax, whatever) your score will go up that day. If they do not remove it your score will go up slightly but it will take time and a paid "Collection" account will still be listed.
Keep your payments up-to-date and you should be good. Don't get more credit. A score of 750+ is average for a good IR. Just keep showing the credit companies that you can be trusted to repay loans. Now is a good time to pull all three of your credit reports and analyze them. Correct any errors and make sure everything is correct.
Everyone needs to do a part whether it be small or on a larger scale; if we all do something it all adds up for the benefit of the planet. For us & future generations.