Credit Score Factors
The information contained on our credit reports affect every aspect of our lives; including employment, insurance, and even interest rates (mortgage, credit cards, automobiles, etc.). There is specific information captured on our report which is used to form our credit score:
? Payment History (accounts for approximately 35%)
? Outstanding Debt (accounts for approximately 30%)
? Length of Credit History (accounts for approximately 15%)
? Types of Credit Currently in Use (accounts for approximately 10%)
? Recent Inquiries (accounts for approximately 10%)
Payment History ? Your payment history includes the following types of specific Information:
? Account payment information on specific types of accounts (credit cards, retail accounts, installment loans, finance company accounts, mortgage, etc.)
? Adverse public records (bankruptcy, judgments, suits, liens, wage attachments, etc.), collection items, and/or delinquency (past due items)
? Severity of delinquency. The more recent the problem, the larger the impact on your credit score.
? Amount past due on delinquent accounts or collection items
? Time since and frequency of past due items (delinquency), adverse public records, or collection items
? Number of past due items on file
? Number of accounts paid as agreed
Outstanding Debt ? Your credit score is adversely affected if you owe amounts at or near your credit limit, so if possible, split the balance and transfer some of the debt to a second card. A low balance on two cards is better than a high balance on one. (Credit card companies usually charge a 'transfer' fee, but 'reward' you for switching you debt by offering a low interest rate. Sometimes the interest rate offered is for an introductory period only, so make sure you read the fine print before transferring your debts.)
? Amount owing on accounts
? Amount owing on specific types of accounts
? Lack of a specific type of balance, in some cases number of accounts with balances
? Proportion of credit lines used (proportion of balances to total credit limits on certain types of revolving accounts)
? Proportion of installment loan amounts still owing (proportion of balance to original loan amount on certain types of installment loans)
Length of Credit History ? The longer you have maintained your accounts, the better it reflects on your credit report.
? Time since accounts opened
? Time since accounts opened, by specific type of account
? Time since account activity
Types of Credit in Use ? Loans from finance companies generally lower your credit score. According to FICO, this is heavily relied upon when there is little other credit history upon which to base a score.
? Number (or amount) of different types of accounts (i.e. installment loans, credit cards, retail accounts, mortgage, consumer finance accounts, etc.)
Recent Inquiries on Your Report ? Recent applications for several new accounts may negatively affect your score. If you inquire about special promotions it does not affect your credit report.
Now that we know what factors the credit bureaus consider when calculating your credit scores, you might be saying to yourself... yeah, yeah, I've heard all that before. Tell me something I don't already know, like how I can raise my score!
With that thought in mind, pay your bills on time. If you have recent late payments on your credit report, lenders view this as you larger credit risk. When you get your bills, don't let this sit on your kitchen table collecting dust. Keep a log of your current bills by due date and the total amount due. Having a late payment appear on your credit report today can have a larger impact on your credit score than filing bankruptcy five years ago!
Manage your credit effective, and don't say... "Duh, that one is obvious". I am definitely stating the obvious here. However, one of the most common ways for consumers to get into a downward spiral credit wise is the poor choices we all have made using the unsecured portion of our credit; CREDIT CARDS. Credit cards do offer immediate relief (or often time's instant gratification) to our needs (or wants). Don't go out buying luxury items if you don't have cash readily available to pay for those items when the bill comes due. That means saying "NO" to plasma screen TV's, new furniture, Gucci watches, and all the items that we "simply can't live without".
Anytime you run a balance on an unsecured credit card or line of credit, it has an impact upon your credit score. By focusing on keeping the balance you carry on your credit cards / lines of credit to less than 25% of your total line of credit, you will be in better shape regarding your credit score.
For more information regarding your credit scores, credit reports or debt options currently available to you, please contact Gateway Credit Connection or visit us online at http://www.creditmonkey.com
Michae l Goff is the Co-Founder of Gateway Credit Connection, helping empower consumers to take control of their personal and business finances.
Gateway Credit Connection 15770 Dallas Parkway Suite 1100 Dallas, TX 75248 469.547.4323 Visit us online at http://www.CreditMonkey.com
Check 21 is the common name for the Check Clearing for the 21st Century Act.... Read More
Like me, you've probably been offered a fair old number of these by now.....and, if... Read More
Credit Cards can bankrupt you if you let them run away from you. The various... Read More
I didn't think it was possible. But it is. Folks, there is something worse out... Read More
When applying for a loan to purchase a car, the lender will want to take... Read More
If you are one of the millions of people out there with bad credit you... Read More
1. Buy clothes at thrift stores. BEFORE you buy them, however, hold the clothing to... Read More
Today, credit is an indispensable part of our lives. In order to get the things... Read More
A bad credit history can sometimes seem like a curse... whenever you apply for financing... Read More
Secured and unsecured debt - what's the difference?It's easy to just think that debt is... Read More
Keep Your Credit History Clean - Remove A Negative Credit Record From Your Credit ReportIt... Read More
In addition to the APR (annual percentage rate) and the finance charges, most credit cards... Read More
Credit card companies want your business. After all, lending money to people is profitable. Besides... Read More
Credit card debt is a major social problem in some Western countries. To rid yourself... Read More
Debt management programs can be of real help for people that discover they cannot face... Read More
It is important to know your credit rating for a number of reasons. Believe it... Read More
Credit Cards are essential for any consumer today. However, when choosing a new credit card... Read More
Do you have enormous credit card debt? You are certainly not alone. According to research,... Read More
Identity theft is a growing concern among Americans, and rates among the top five complaints... Read More
In 2003, Congress passed the Fair and Accurate Credit Transactions act (FACT), which made it... Read More
Most businesses want to be able to borrow money when they need it, without the... Read More
Rewards cards have become the latest rage in the credit card industry. In the past,... Read More
1) Do your homework. Applying for and getting approved for a credit card is nothing... Read More
It's not as hard as you think to raise credit score. It's a well known... Read More
Parents have the full responsibility for their children and their education. It is up to... Read More
STUDENT CREDIT CARDS With graduate debt averaging over ?12,000, the ability to... Read More
There is no end to the amount of pain that your credit report can cause... Read More
What is Credit? Credit is money granted by a lender (or creditor) to a debtor... Read More
A credit report is more than just a snapshot of your financial picture; it can... Read More
Now in a world with so many easy to get credit cards it can be... Read More
WHAT IS HIRE PURCHASE/CONDITIONAL SALE?Although people often talk about "buying on HP", Hire Purchase Agreements... Read More
Credit score is one of the most basic, determining factor while loan borrowing. Credit score... Read More
There will come a day when you need credit. You may want to buy a... Read More
The nightmare of identity theft strikes an estimated 750,000 people every year. How can you... Read More
"Erase Bad Debt !""Remove Negative Items From Your Credit Report"You've probably seen these headlines and... Read More
Having a better credit score not only represents easier access to money from lending institutions,... Read More
Credit Score FactorsThe information contained on our credit reports affect every aspect of our lives;... Read More
Credit card debt is a growing sickness in the United States and Europe. It is... Read More
Credit counseling companies come in all shapes and sizes. Whether you are looking at working... Read More
When you're dealing with credit cards, you're playing with fire. Unfortunately, there are plenty of... Read More
Introduction In this article, a presentation is made of the differences between major credit... Read More
Bad credit can be a burden for otherwise good credit. It may not seem fair... Read More
You've decided to apply for a Citi MasterCard, but with so many different cards to... Read More
What is trade credit?One of the major differences between consumer and commercial transactions is that... Read More
You may already have 2 or more credit cards in your purse or wallet and... Read More
If you want to enjoy your life out of spending, enjoy if you have your... Read More
Credit score is the key factor determining approval of almost any type of credit. It... Read More
Here's a simple system on how to pay zero interest and get tons of free... Read More
There are times when you may be turned down for credit and you do not... Read More
Your credit file may not reflect all your credit accounts. Although most national department store... Read More
Until recently lawyers for victims of credit damage had little... Read More
Credit repair, is in a word, vital to reestablishing your... Read More
Having a better credit score not only represents easier access... Read More
There is no end to the amount of pain that... Read More
Using a credit card wisely is an important step in... Read More
A good credit history is critically important for the consumer.... Read More
Article excerpted from the new book, "How to Do Space... Read More
Do you know why you should check your credit report?Of... Read More
Mark and Beth, a young married couple in their twenties,... Read More
Congratulations college freshman! You're about to embark on one of... Read More
Listed below is a useful guide to credit card terms.... Read More
Rewards cards have become the latest rage in the credit... Read More
Moving money from credit card to credit card to take... Read More
Have your read your credit card contract through completely? Do... Read More
According to the September 2004 issue of the Nilson Report,... Read More
Have you ever wondered why your credit card bill is... Read More
The all important credit score! It determines the amount of... Read More
Identity thieves take advantage of everyday opportunities to discover your... Read More
If you find that creditors are calling you almost daily... Read More
Online car finance is convenient. You can apply over the... Read More
Your credit rating / credit score is based upon how... Read More
Believe it or not, the way society, especially the commercial... Read More
Almost all students have and use student credit cards. Some... Read More
It is important to know your credit rating for a... Read More
As of Thursday, December 1, 2004, one-third of Americans will... Read More
"Cut Your Payments in Half!" the headline screams. "Consolidate Your... Read More
Help! I've Been Turned DownYou received an envelope in the... Read More
In the olden days, about 10 years ago, before the... Read More
A consumer credit report is a factual record of an... Read More
1. Deleting Errors in 48 HoursThis is the absolute fastest... Read More
Do you have a poor credit rating? If so, you... Read More
Fact: Over 150 million Americans have credit report with the... Read More
It is wise for you to have a company credit... Read More
There are three main credit bureaus in the United States;... Read More
In addition to the APR (annual percentage rate) and the... Read More
Here are some useful tips on borrowing money. Borrowing money... Read More
Bad credit can be a burden for otherwise good credit.... Read More
You hear people talk about credit reports all the time... Read More
Reach into your wallet or purse, pull out a card,... Read More
The recent security breach at credit card processor CardSystems Solutions... Read More
In "Become the Squeaky Wheel" a book recently published, Michelle... Read More
Getting worried that one of your clients, customers or patients... Read More
So-called "credit repair" companies claim they can remove negative information... Read More
The process of clearing credit can be laborious and frustrating.... Read More
Credit card companies want your business. After all, lending money... Read More
Prepaid debit cards are great financial tools and may be... Read More
How do these people get my name? If you have... Read More
It goes without saying that your first and best defense... Read More
Credit is a funny thing. It can be a useful... Read More
Which of the following is the biggest threat to your... Read More
Credit Credit |