Understanding And Improving Your Credit Score

Since 30% of your ph4dge.com score is calculated by factoring in the percentage of your available credit being utilized, it is possible to have a poor credit rating despite having a good payment history by keeping your credit card balances close to maximum limits, which is what happened in Kelly's case.

Ali also operated the first Better Business Bureau accredited Credit Repair Company in the State of California. Imax Credit Repair is a reputable state registered company operating in 22 states across the US.

Length of Credit History-15%

Payment History - 35% Credit Card Capacity (Amount You Owe, compared to credit limit) - 30% Length of Credit History - 15% Types of Credit - 10% New Credit - 10%

Now what caused Kelly to have a mediocre credit score despite having a flawless credit Low Rate Bad Credit Loans - Improves Your Credit order to answer this question we will look into how Fico Scores are calculated. Below are five factors that are used to derive your Fico Score:

It is not how much money you owe, but what percentage of your available credit limit you are using up. You are going to affect your score more adversely if your combined credit card limits are $500 and you are using $400 of it, as compared to using up $50,000 of $100,000 available credit.

Data was furnished by the Consumer Federation of America and Fair Isaac Corp., the company that created the most widely used credit score formula called FICO.*

If you do foreseeing yourself being late on a bill , you are better off notifying the creditor in advance as some installment loans might allow a special 30 day forbearance without any adverse affect on your credit.

Kelly is a middle class blue collar Bad Credit Tenant Loans - Manage Your Debts who has made a conscious effort to keep a positive credit standing with all his creditors, ranging from his mortgage lender to his credit card company.He has prided himself in ph4dge prompt payments to all his creditors and not incurred a single late payment in his entire life. However, much to his horror he got turned down for a $300 limit Sears store card, the reason being a mere 589 Fico Score.

New Credit - 10%

Of the three different types of accounts above, not having an open credit card account will affect your credit the most. So for those who do not have an open credit card, simply by acquiring one will result in a Fico Score boost of up to 30 points.

Your score is also calculated by factoring in the average length of time accounts have been open on your credit report. Opening a new account contributes negatively to this factor, also it is not wise to close old accounts as they will lower this average. Therefore you will notice as accounts become more seasoned your credit score will propel provided Mobile Home Loan Default - Repossession Or Foreclosure? new accounts have been opened.

A recent late payment affects your credit more adversely than an older one, so do not be surprised to see a drop of 60 odd points on a new late you incur if you currently have a flawless credit history.

The older your credit history is the higher your credit gets propelled by this factor. You can expect someone with a 20 year old credit profile to have a relatively higher Fico Score than compared to someone that has had a credit profile for 10 years, considering all other factors are similar.

• Ensure credit bureau data is accurate and dispute legitimate errors.
• Pay down the credit cards first that are near their limits (assuming interest rates are close to the same).
• Pay down total Losing Your Credit Card balances, but do not close these accounts. (i.e. keep balances low and limits high).
• Move revolving balances to installment debt; but again, do not close the revolving accounts.
• Minimize new accounts, do not open any credit accounts unless necessary or if you are looking to diversify your mix of credit accounts.
• If you are transferring balances due to an offer from a new credit card company, a better strategy than getting a new credit card is to ask your current credit card lenders if they have any existing offers, rather than opening a new credit card.
• If you have closed some revolving accounts recently, a better strategy than opening up new accounts would be to call the lenders where he or she closed the account and see if they can re-open the same accounts and are able to keep the original open date.

Payment History-35%

This factor pertains to the assortment of the credit accounts found on your credit profile. In order to satisfy this category, one is expected to have open and active at lease one of each of the different credit accounts: a) Mortgage Account b) Installment Account c) Revolving/credit card account.

Credit scores also known as Fico Scores range between 300 and 850, with scores over 700 being considered respectable scores, score below 660 would find it difficult to get approved for even small credit cards , similar to the one Kelly applied for. Keep in mind that 58% of Americans have a Fico Score exceeding 700, 27% fall between 600 and 700, with the remaining 15% scoring below 600 *.

Now that you are able to better comprehend the computation of your credit score, let's do a recap of what steps you can take to ensure the optimal Fico Score.

Therefore you should carry balances on not more than a couple of credit cards and preferably keep their balances at 10% utilization of the credit limits of those accounts. Doing so can result in an increase of over 60 points.

Understanding Mortgage Foreclosure - Escape the Nightmare of Foreclosure Improving Your Credit Score

This is the most self-explanatory category, simply pay your bills on time and do not be more than 30 days late on any bill, as creditors start reporting late payments on your credit at that time.

Now let's study these five categories closely and figure out what you need to do to optimize your credit score.

Types of Credit - 10%

Also factored into this category are recent requests for your credit reports made by prospective lenders and the number of Bad Credit Unsecured Tenant Loans - Good Days Are Back opened accounts you have. It is advisable to keep both at a bare minimum.

Ali has been proactive in consumer credit advocacy and the founder of the National Association of Credit Repair Organizations (NACRO), an organization that sets bench marks for credit repair companies and pushes for pro consumer legislation pertaining to the Fair Credit Reporting Act

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