What Is A Credit Score And Tips On Raising It
What is a credit score?
Your score is a numerical rating based on factors that are measured by your willingness to repay loans. The score is calculated from the information that is in your profile which is a record of all your credit activities. This score predicts your credit performance, which means the higher your score, the better credit risk you are.
The FICO score is the most frequently used credit scoring system that has been developed. You may obtain your score from any or all three reporting agencies or by Clicking Here. It is better to monitor all three to make sure your credit score is accurate. Equifax (800) 685-1111 Experian (888) 397-3742) Trans Union (800) 916-8800
Since a credit score is from credit history, there must be at least a 6 month history to get an accurate score. You must have at least on account that has been open for at least 6 months and has activity in those six months.
Credit history is very important to be eligible to apply for a mortgage loan. If your score is low, there are ways that it can be raised, but not in a short amount of time. It is important to create credit habits that will make sure your credit score stays high at the time that you need it. What are some of the factors that are considered in your credit score?
The credit score will only look at your willingness to pay back a loan. It tells the creditor how likely you are to repay that loan on the accumulation of your past performance and current standing. Information such as savings, income or demographic data are left out of your credit profile. It is not meant to measure you ability to repay the loan, just your willingness. For your ability to repay the loan, your lender will look at the debt-to-income ratio.
The credit report does track both the positive and negative activity in your credit history, such as timeliness of payments, current debt balances, length of credit history, types of credit available to you, the number of credit inquiries and any legal action taken against you for non-payment (such as bankruptcy or a lawsuit.) Although late payments will reduce your score, a current history of timely payments can raise it.
Different weights are assigned to the various factors considered. For instance, FICO assigns thirty-five percent of your score to your payment history, thirty percent to your debt level, fifteen percent to the length of time span of your credit history, also fifteen percent to the type of loans such as installment versus revolving, and five percent to your credit score requests, which measure your level of pursuit after new credit.
Since this information is considered in most applications for credit, loans, mortgages and even insurance or employment, it is important that you maintain a high credit score and ensure an accurate credit report. To Get yours Now Click Here
How can you raise your score? Raising it takes time, you can raise it by as much as 50 points per year by carefully managing your credit. You should develop positive credit habits to promote good credit history. Make sure you pay everything on time, even your utility bills. Make sure you check all three credit bureaus to make sure everything is accurate, make sure you do not max out your cards, leave an available balance. Obtain all reports annually and make any corrections in writing. Click Here to get your score. You should always continue to re-establish your credit, even after a bankruptcy. Most lenders are concerned more about what happens after this derogatory incident. Continue to monitor all reports and make sure all your corrections are in writing.
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