Know the score about credit

admin • September 30, 2013

Credit bureau scores are often called “FICO Scores” because most credit bureau scores used in the U.S. are produced from software development by Fair Isaac and Company (FICO). FICO scores are provided to lenders by major three major credit reporting agencies; Equifax, Experian and Trans Union.

The credit score number based on an analysis of information contained in a credit report, which provides an indication of how likely a person, is to repay his or her debts. The number can range from 300 to 900. FICO scores provide the best guide to future risk based solely on credit report data. The higher the score, the lower the risk.

Here’s how your credit score is determined:

  • Your payment history determines 35 percent of the score. How many bills have been paid late, how many were sent for out for collection, Bankruptcies- these are the kind of things that impact your score. The more recent, the worst the impact.
  • Outstanding debt determines 30 percent of the score. How much you owe on car loans, home loans, etc., how many credit cards you have and how many of them are at their limit. The more cards you have their limit, the lower your score will be.
  • The length of time you’ve had a credit is a factor for 15percent of your score. The longer you have had established credit, the better it is for your score.
  • If you have applied for a lot of loans or credit cards, you will have a lot inquires on your report. These are bad for your score because it may indicate you are in some kind of financial trouble. The most recent the inquiry, the worse it is for your score. This determines 10 percent of your score.
  • Another 10 percent of the score is based on the types of credit you have. The number of loans and the available credit from the credit cards makes a difference.

Looking at this breakdown, the length of time you have had credit is one of the most important parts of your credit score. Your credit cards are what push you into the 700 to 800 point range. The longer you have them in good standing, the higher your score increases. When you close a credit card this will have the opposite effect, this will drop your credit score drastically, because you closed out all history you have built on this card.

Remember a credit card should just be a tool to improve your score. Just small purchases and pay off the card every month.

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Red light camera tickets a credit risk – About a month ago I started getting calls from banks and mortgage companies that their loans all over Albuquerque were falling through for auto and mortgage loans. The reason? Years of red light camera tickets recently went into collections, all at one time, and thus put on the credit reports of Albuquerque consumers. Sure enough, I had many clients come in to have meetings to see if they were credit ready wise. Scores were knocked down between 35 and 45 points for each collection entry for these red light tickets.

Keep lease judgments off credit history

By admin • October 2, 2013
Keep lease judgments off credit history – I have seen many cases on my office of consumers with judgments on their credit reports due to early termination of a lease. In many cases the lease was walked out on due to a hostile living environment. Whatever the case, there are things to get this mark removed from your credit history.

Don’t let someone else’s credit problems slow you down

By admin • October 2, 2013
Don’t let someone else’s credit problems slow you down – Cross-referencing of others on your credit report – credit information that erroneously shows on your report because another person shares identical or similar name – can cause great financial hardships and has become an epidemic. I get one to two cases of cross referencing, and if the person you’re being cross referenced with has negative credit history, this will completely shut down your ability to get A+ credit.

Your own personal credit FAQ

By admin • October 2, 2013
Your own personal credit FAQ – I get a lot of questions at Credit Rescue Now, Where we counsel consumers about financial landscape and how to make sure their credit remains strong and sound. I thought it would be helpful to put together a list of frequently asked questions and answers. I hope this information is helpful.

Take care of your credit while renting

By admin • October 2, 2013
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