What Comprises your Credit Score
What Comprises your Credit Score
In the simplest terms your credit score is your credit history calculated in figures. There are many methods which can be used to calculate your credit score but the most common method is the FICO. FICO was developed by the Fair Isaac Company and is the preferred method used by most lending companies. Your credit score determines whether a lender will approve your application or not or whether a lender will give you less rates on your payments or not.
Credit scores or FICO scores generally range form a low of 340 to a high of 850. Ideally, you should aim for a score of at least 700 or more. If you get a score of 600 and below, creditors will likely consider you as a high risk borrower.
Knowing how your credit score or your FICO score is calculated will help you become more aware of your spending and your payment habits. Let’s consider the break-down of categories used to sum up your credit score.
What comprises your credit score?
35% of your credit score depends on how good of a payer you are. If you make it a point to pay all your bills promptly, you should have no problem obtaining the complete 35% of your credit score. However, if you’re in the habit of delaying or skipping payments, or if you defaulted on some of your debts, your credit score will also be affected.
30% of your credit score is calculated based on the level of your debts. Do you always maximize the use of your credit limit? Were there instances that you’ve even exceeded your credit limit? If so, then you’ll likely get a low score on your credit utilization. Hence, borrowers are advised to keep spending below their credit limit. As much as possible, keep your balances at least 50% lower or even less of your credit limit
15% goes to the length of your credit history. How long has it been since you started your credit report? The longer your length of credit history is, the better your score will be. This is because, the more information your creditors can get out of your credit report, the better they can gauge you as a borrower. This is why it is very important to establish a good credit report as early as you possibly can. Also, this is the reason why you should always think twice before closing accounts that you’ve had for a long time.
10% of your credit score is based on inquiries. If you’re in the habit of submitting credit card applications just for the heck of it, your credit score can be affected. Also, whenever a creditor denies your application, it can also have an impact on your FICO score. Thus, before submitting any application, see to it that you really intend to get an approval out of it.
The other 10% of your credit score is based on mix of credit. If you have a credit card account, a car loan, a mortgage loan and various types of insurance policies, it will show your flexibility and dependability as a creditor. If you’ve been able to manage all these different types of accounts without any problems on your payments, then you’ll likely get a perfect score on this category.
Liz Roberts is a loan consultant with Loan Hunt Finance and has been providing consumers and business owners with home loans financing since 1989. For years she has helped people with home loan problems especially pertaining to home mortgage loans and bad credit home loans.
Copyright 2007
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Equifax Small Business Credit Report Review
Equifax Small Business Credit Report Review
Equifax now has small business credit reports which help you monitor your relationships and diversify revenue streams. With our coupon code, you can get the small business credit monitoring, management, and alerts for only .95 a month.
Click Here to Visit Equifax Business Credit Report and Get it for only .95
With Equifax, you can manage all of your major business customers and key partners to protect yourself from losses. You get bankruptcy alerts letting your know if any bankruptcy event is reported, you get derogatory alerts which included liens, judgments, charge-offs, and delinquent amounts greater than or equal to 60 days past due reported.
You also get inquiry alerts if any new inquiry is made on the bureau report and an Equifax score drop alert when any negative credit risk score change of 20 points or more happens.
In addition to all of the above, you get daily email as new alerts are detected and unlimited Bureau Reports.
Using this service can help you stay atop of your business and know if your partners and major business customers are experiencing any problems that they are not sharing with you. This can help you prepare to make changes if a key business partner suddenly files for bankruptcy.
Instead of finding out 2 months later when you never received your major order, you would be notified ASAP so you can change your plans and continue business as usual.
What are you waiting for? Protect your business and diversify today!
Click Here to Visit Equifax Business Credit Report and Get it for only .95
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At Quizzle, we make it easy to manage your home, money and credit – all in one spot. We give you a bunch of helpful free tools – like a free credit report, free credit score, home value estimator, home loan recommendations and budget planner – so you can make better decisions about your personal finances. Quizzle.com also offers some extras in case your home, money or credit situation could use a little tweaking – things like a credit personal trainer that lets you know what actions you can take to impact your credit, or a identity theft protection tool that monitors the Internet and your credit report 24 hours a day, or our credit monitoring service that lets you know about important changes to your credit report. We’ve partnered with industry leaders to provide you with these services and we do it at a fraction of the cost of other companies. At Quizzle, we give you access to your most important financial information and the means to make improvements. Start managing your home, money and credit today – it’s easy and it’s free. www.Quizzle.com By joining Quizzle (it’s free!), you’ll also get access to a wealth of great tools and information to help you make smart decisions about your life. Stuff like a home value estimate, neighborhood report, home loan recommendations, budget planner and expert personal finance advice. Visit www.Quizzle.com to get started.
They can also use your social security number when getting a job or your driver’s license to get a duplicate copy. Yes, you can prevent identity theft. Identity theft is a hideous way of criminals to steal and sell your Social security number, credit cards and bank accounts and passwords, to the illegal internet market. Unknowingly, your assets and identity will be hacked and used by other people. You will just be stunned discovering you are left with nothing and sometimes you are left with several debts that you did not make.
He Pleads To Credit Info Theft
He Pleads To Credit Info Theft
On Friday, Albert Gonzalez of Miami appeared before the US District Court in Boston and pleaded guilty on various cases that he has been charged with. Among the charges are 19 counts of conspiracy, computer, wire and access device fraud and aggravated identity theft. He also pleaded guilty on one charge of conspiracy to commit wire fraud.
Gonzalez’ involvement is so far the largest in credit and debit card fraud in the history of the country and he has victimized numerous people and several retailers like Barnes and Noble, Sports Authority, Boston Market and Office Max. Dave and Buster’s restaurant system is his victim in his charge of conspiracy in committing wire frauds.
The Justice Department said that Gonzalez and other conspirators operated by gaining access to credit and debit cards for retail stores. They made use of sniffer programs and “wardriving” techniques to get debit and card numbers from customers. The stolen numbers are then sold by Gonzales and other schemers to other individuals. The fraud cycle ends as these individuals encode stolen number on magnetic strips of blank credit cards and withdraws thousands of dollars from ATMs.
Gonzales’ operations resulted to over 40 million stolen credit and debit card numbers, one million dollars (now forfeited), a 2006 BMW 330i, a Miami condo, Rolex watches and a Tiffany diamond ring. Aside from these, he also faces 130 million credit and debit card number fraud charges from New Jersey alongside two Russians. Heartland Payment Systems, Hannaford Brothers Co. Inc. and 7-Eleven Inc. are the companies that they allegedly stole the numbers from.
U.S. Secret Service Director Mark Sullivan said that technology has a lot to do in the way wrongdoers do their dirty works by virtually erasing geographic boundaries. However, he assured the public that even with the aid of technology, these wrongdoers will be arrested. The Secret Service, in partnership with law enforcement agencies across the nation and the whole world, is ready to face cyber-criminals by adapting their investigative methodologies to technology.
Gonzalez’ arrest shows us three things: the fact that cyber criminals do exist and that government is doing their job in combating this problem. The third “thing” is that you should act before you become a victim of these scammers. Offense is the best defense so they say. Be defensive with your data and start having a credit monitoring service with your cards. You can find useful credit monitoring facts on the net or ask around with your friends for their provider.
Gerald Shaw is a voracious reader. Maybe that’s why he writes so well.
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Fraud Alerts and Credit Monitoring will not detect or stop Synthetic Identity Theft
Related Credit Monitoring ArticlesFraud prevention services emerged out of the need to centralize the monitoring and protection of personal records for consumers with sophisticated and state of the art technology to more accurately protect subscribers than they could if they were to implement these methods of identity theft protection on their own. Out of the now dozens of available services that offer fraud protection, its going to be a little confusing for some to decide which identity theft protection service to sign up for in order to get the ultimate protection. Most individuals today are concerned with the security and privacy of their your own personal information or that of their family, or, a company concerned with the personal information of your clients and employees.
Key Differentiating Features of Free Credit Report Offers
Key Differentiating Features of Free Credit Report Offers
People need to retrieve their credit reports for a variety of reasons. Most usually get them on the Internet. This is simple to do with a quick Google search. What might come as a surprise is the number of credit report offers, especially those marketing both free credit reports and scores. It can be a little overwhelming and confusing for some so let me shed some light on these promotions.
The only place on the Internet to get completely free bureau credit reports is at the website www.AnnualCreditReport.com. This is a government authorized site people can go to retrieve their Equifax, TransUnion, or Experian credit files. Consumers are entitled to one free credit report every 12 months under the Fair Credit Reporting Act. The offer does not include a look at any of the three bureau credit scores, so this might be a drawback for some.
Many free credit report offers also come with free access to bureau credit scores. However, a caveat to these types of deals is that they require users to first sign up for a free trial membership into a credit monitoring service or other program. This may be acceptable for some, as there are no obligations to keep the service after the trial has expired. To help differentiate the many merchants and deals that are offered, I’ve listed some key points to consider before one decides.
How many free bureau reports are offered? How many free bureau credit scores are offered? Is there a conditional free trial membership that users need to sign up for? How long is the free trial for the credit monitoring? Is there Identity Theft Insurance Coverage and how much is it? Is there a Credit Simulator tool or other credit resources offered?
Josh offers tips on how to better manage one’s credit and finances. One place to start would be to understand your credit report and score.
For more credit related articles, please visit http://www.creditreportcamp.com
is this what you are asking for?
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www.IdentityTheftLabs.com – This site gives you a comparison of credit monitoring services to give their clients the best service to choose. The credit report monitoring has been prepared by IdentityTheftLabs for an easy overview of these services. Visit this site now.
More Credit Monitoring ArticlesThere are many things we can do to make it at the very least tough for thieves to steal our personal information. Identity theft can damage your credit rating. I found that there so many ways in which identity theft can enter and complicate your life.
Your Health And Your Credit
Your Health And Your Credit
Why is it important for you to actually find out what your credit report reflects at least once a year? Why is it important that you check out just what is on that report and what is your credit score? Some people just do not find the time to do that. In fact, they just only pull up a copy of their credit reports if need be. If there is no need for such, they just do not bother. But that should not be your attitude when it comes to this matter.
Take for example this story. It may have happened or it may not yet have happened. But in case it does, this is just a figment of the author’s imagination just so as to drive a point. See, let us say that this person’s name is Peter. For Peter, he is just your ordinary employee who is striving his way through the daily grind and is just trying to make a living. Just because he does not need his credit report, he has not pulled up a copy of that so as to save some money, he says. But he should have and he should have done that regularly.
See, by the time Peter pulled up a copy of his credit report because he needed it for a loan that he wanted to get, he was surprised to find out that he owned a lot of things. In fact, what was reflected in his report was that he owned tons of money for medical bills. He has never had any problem with his health for years and has not even stepped inside a hospital for years more. The only time that he was in a hospital was when he visited a friend. But that was that.
This is one of the main reasons why you should regularly see what your credit report tells you. That way, you can definitely find out what is happening and if you have already become a victim of identity theft. Or in this case, it is known as medical identity theft. And you do know that medical bills can go skyrocketing. If you do find out that you are a victim of fraud, you can actually put a stop to it as soon as possible and get it corrected immediately. Credit monitoring will help you with that and can give you help as well. Credit monitoring facts discuss this. You do not want to end up like Peter.
Gerald Shaw is a voracious reader. Maybe that’s why he writes so well.
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How credit alerts from credit monitoring service like FreeScore can help protect your identity – FreeScore.com
Find More Credit Monitoring ArticlesIdentity theft is a hideous way of criminals to steal and sell your Social security number, credit cards and bank accounts and passwords, to the illegal internet market. Unknowingly, your assets and identity will be hacked and used by other people. You will just be stunned discovering you are left with nothing and sometimes you are left with several debts that you did not make. You can not exclude yourself, everyone is a potential victim.
Credit Repair: Improve your Credit Scores Now!
Credit Repair: Improve your Credit Scores Now!
Understanding the World of Credit Scores
Most people are not aware that most credit scores sold online are not the same credit scores that lenders use in making lending decisions. The score used by lenders is called the FICO score and it is the only score that counts. Unfortunately, the companies that sell non-FICO scores do not make it clear that these scores may vary widely from real FICO scores. Worse yet, the three credit bureaus that provide FICO scores to lenders are among the worse offenders in selling non-FICO scores to consumers!
One Score Three Names
The FICO score has been re-branded by each of the three bureaus for their own marketing, hence you will hear of three scores, although they are all driven by the same software. Equifax calls it a BEACON score, TransUnion calls it an EMPIRICA score, and Experian calls it the EXPERIAN/Fair Isaac Risk Model. The scores may be different because each bureau gathers information from a slightly different mix of creditors. If you look at your three reports you will notice that some accounts are missing on each bureau. Timing also plays a roll. A recent change in your credit may be picked up sooner at one bureau than another. You can purchase your real FICO score at MyFico.com.
Improve Your Credit Score Fast
So what makes your FICO score tick? And what can you do about it? Here are a few strategies that everyone involved in the credit repair process should know.
Check Your High Credit Limits
The relationship between your current balance and the available credit limit on your revolving accounts has a major impact on your credit score. Every revolving account on your report should be examined. If the high credit limit is understated send a dispute letter to each of the three credit bureaus asking them to update the information. If you have extra cash, pay down those balances and watch your score go up!
Increase Your High Credit Limits
There is one additional course of action that you should consider that can also reduce the ratio of your current balance to your high credit limit. Call each and every credit card company and ask them to increase your limit. They may or may not agree, but you might be surprised. Please keep in mind that you are doing this to improve your credit. Having a higher credit limit does not mean that you should use it.
Check the Age of Your Accounts
New accounts count against your credit score. Conversely, the credit bureaus will reward you for the accounts that you have maintained over time. When reviewing your three credit reports be sure to look carefully at the initial reporting date for each revolving and installment account. If the age of the account is incorrect on your credit reports send dispute letters to the bureaus. This is a great credit repair trick and well worth the effort.
Resurrect an Old Account
It is not unusual to discover an account on your credit report that you forgot about years ago. If you don’t have much credit please don’t cancel the account. If you no longer have the card in your possession I suggest that you call the company and obtain a replacement card. When you get it you should make a small purchase. The exact algorithm used in the FICO score is a secret, but based on our observations it is best to have some occasional activity on a credit card.
Double Trouble! Eliminate Duplicates
Look at your credit reports carefully. If you see the same account more than once it is probably hurting your score unless it is over three years old with a perfect history and a low balance. If it does not meet these criteria get rid of it now! Collection agencies are notorious for causing duplicate reporting errors. Only one collection agency can own a debt at a time. Essential credit repair tip! If a collection agency no longer owns the debt they are not allowed to report it. That’s the law!
Post Bankruptcy Cleanup
If you have had a bankruptcy you should take action to clean up your credit with all three bureaus immediately upon receiving your discharge. If you don’t feel up to the task of dealing with the paperwork I suggest that you hire a reputable credit repair company. A reputable credit repair company will be inexpensive and be able to do this for you very quickly. If you don’t take action to clean up your credit report it will not happen by itself. A comprehensive post bankruptcy clean up can have a dramatic impact on your credit scores within as little a sixty days after your discharge.
Copyright © 2007 James W. Kemish. All Content. All Rights Reserved.
Jim Kemish is the president and founder of Power Mortgage, a Florida mortgage company based in Delray Beach, Florida. Power Mortgage Corp was established in 1989 and serves the states of Florida, Georgia, Massachusetts, and Virginia. Jim is also the President of Sky Blue Credit, a national credit repair business.
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Related Credit Score ArticlesThis could include your kids, your accountant, attorney, vendor, and a bunch of others. Contrary to all beliefs, the information security and protection business is not an old profession. It can also be because of careless handling by an employee of a company where you used the credit card to make a purchase. The second and more dangerous form of identity theft is when someone steals your identity, and opens up credit card accounts, or cell phone accounts in your name. They can also use your social security number when getting a job or your driver’s license to get a duplicate copy.
What’s My Credit Score?
What’s My Credit Score?
If you’re applying for a loan or credit card, your credit score could have an impact on your interest rate and loan term. So what is your credit score and what does it mean? What does it say about you? Credit scoring is how creditors or lenders assess their risk when lending money to you. They look at your score and it indicates to them how financially responsible you have been in the past.
Your credit worthiness is calculated by credit scoring agencies and bureaus. You should get a copy of your credit score at least once a year and make sure that there are no mistakes or omissions in it. You can get this information for very little money and sometimes for free. Your actual score will be between 300 and 900. Higher scores are much better and can get you great interest rates, longer pay-off periods or terms, lower fees and less paperwork in the application process. Low scoring applicants are usually rejected all together or they are offered high interest rates, high minimum payments and more fees. Sometimes low scoring applicants are accepted based on their employment history or other factors, but generally aren’t as trustworthy as their higher scoring counterparts.
Is your score a good score? 650 or higher is a very good score and will generally earn you the very best terms when applying for loans. If there are a few minor problems with your credit history, such as a couple of late payments in the last few years, then you can score between 620 and 650, which is still a good score. You may run into a few problems with this score, but generally it is still pretty good. You’ll probably end up with slightly higher interest rates than people with excellent credit. Scoring under 620 puts you into a risky category. You may still be approved for a loan, but it will be at the highest interest rates and you may be considered a big risk to lenders.
Things that affect your credit score include your borrowed money payment history, late payments and missed payments. Late and missed payments on a credit card or loan are very big considerations when calculating your credit score. You should try to never make a late payment because it blemishes your record for years. Another thing considered when figuring your credit score is your debt to income ratio. If your level of debt is very high relative to your income, or if the cards you have are close to their spending limits, then your score will probably go down.
If your credit history is very long and you’ve had revolving credit for years, then your score may drop. Trouble paying things off completely makes you look like you are in over your head, or you’re just not trying to pay off your debts. Inquiries on your credit are another thing that is looked at. If you’re constantly applying for credit cards and loans, regardless of your acceptance or use of the instrument, then you look like someone who can’t afford the things that you’re trying desperately to get. Do your research before choosing a loan or credit card to apply for. Multiple inquiries on your credit can hurt you in the long run. Your credit score ultimately depends on you.
About the Author: Mike Clover is the owner of www.my720fico.com. My720fico.com is one of the most unique on-line resources for free credit score reports, Internet identity theft software, secure credit cards, and a BlOG with a wealth of personal credit information. The information within this website is written by professionals that know about credit, and what determines ones credit worthiness.
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There are many things we can do to make it at the very least tough for thieves to steal our personal information. Identity theft can damage your credit rating. I found that there so many ways in which identity theft can enter and complicate your life.
Credit Scammer Got Caught
Credit Scammer Got Caught
The US Secret Service arrested a man for fraud and he was victimizing patrons of a certain restaurant on the District. Identified as Alpha Daye Bah, 31 years old from Germantown, he now faces charges at the District’s federal court.
According to court documents, the US Secret Service reported that Bah is one of the many scammers who planned and did the massive scam in credit cards. They said that he is the one responsible for passing stolen credit card numbers to other scammers who in turn uses these numbers in purchasing good and other items. It can be estimated that more than 000 worth of goods was purchased from retailers using fraudulent credit cards.
The racket started about two months ago when an unidentified server stole credit card numbers to more than 20 customers in a district restaurant. The Secret Service did not disclose which restaurant that was. Indeed, it is wise not to disclose such information because it could lead to the restaurant having lesser patrons.
It was during his talk with the investigator from Citigroup that Agent Jonathan Schmucker found out about the stolen credit card numbers. It was the investigator who discovered the fraudulent purchases that were made using the credit card numbers of the patrons of the restaurant.
The scam was detected when Agent Schmucker tracked down the server which processed purchases using the cards. The server confessed that he used a skimming device that captures the data on the card. And when you have that, almost any purchase can now be made. It is through this technology that Bah was able to purchase goods. The skimmer was being turned over to Bah once a week and it was during those times that Bah transferred stolen data to his computer.
In order to have concrete evidence, the Secret Service commissioned the server and in one month’s time, they fed the server with government-issued credit cards. The server then gave the credit card number to Bah and on July 17, one of the accounts was used in purchasing goods at a liquor store.
It can be estimated that more than 0,000 was the total amount of loss to financial institutions which covered the thefts. Bah and Bah’s attorney declined to comment on the matter.
Given the present situation, managing your finances is not enough. It should come hand in hand with credit monitoring. With these, you can be assured that your finances are well covered and that your accounts are not being used to purchase goods that you have no knowledge of. Credit monitoring facts can be found on the net with the help of good standing companies.
Gerald Shaw is a voracious reader. Maybe that’s why he writes so well.
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www.bestonlinereport.com Keeping track of your credit is important! Get smart about your free credit rating report! See whats dragging your score down and how to fix it! You can easily see how changes you make will improve your score! Put a lock on your free credit report- Try BestOnlineReport.com for free today!
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Find More Credit Monitoring ArticlesIdentity theft is a hideous way of criminals to steal and sell your Social security number, credit cards and bank accounts and passwords, to the illegal internet market. Unknowingly, your assets and identity will be hacked and used by other people. You will just be stunned discovering you are left with nothing and sometimes you are left with several debts that you did not make. You can not exclude yourself, everyone is a potential victim. Criminals are just everywhere, you might not be aware of it but they are observing, planning and working like a hungry vulture waiting to strike for every opportunity that comes.
Credit Score: Why It’s Important
Credit Score: Why It’s Important
Anytime we are in a bank or see something even remotely finance related, we here the common phrase of credit score.
Most of us can likely make a fairly educated guess as to what the credit score is. However, we are unaware of the profound impact this little number can have over our financial lives.
The credit score affects much more than if you are going to get that new credit card or not. Credit scores can be the deciding factor in many of our life’s decisions and challenges.
In this article we will look at why it is so important to maintain a good credit score in this day and age.
Your credit score is most commonly associated with anything to do with loan decisions. It probably comes as no great surprise that whenever, you apply for credit card, loans, installment payment plans and mortgages the credit score is one of the major deciding factors.
People with low credit scores will likely struggle to get approval on any of these more so than those with high credit scores. By keeping on top of your finances, you can insure that your credit score remains solid.
The credit score not only decides yes or know on various types of financing, but what rate of interest you will receive. Those with good credit scores are likely to get the premium rates of interest. Those with low scores are going to be charged more. Those with low credit scores can still obtain financing but quite often they are forced to use sub-prime lenders. These lend the money but at much higher costs.
Many are surprised to hear that your credit score can now affect the rate you receive on car and homeowners insurance. Several states have started employing this policy on the evidence that statistically, those with better credit scores are less of a burden. They make fewer claims than those with poor credit.
Finally, sometimes potential employers will look at credit scores when making the decision on whether or not to hire. Those positions in the financial world are known for this. A poor credit history will make some employers reluctant to offer expense accounts and company credit cards.
Nearly all of us need credit accounts to get the things that we need today. Most of us would struggle to buy a new car without financing or a house without a mortgage.
Having credit is important and so is maintaining a good score. Keeping the credit score high can offer better finance opportunities as well as more favorable insurance rates and even that dream job.
Jim Moore comes from a background in engineering and financial services software. Jim has spent the last 20 years as a professional writer working for some of the world’s largest engineering and financial companies. http://www.improveyourcreditscoring.com
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EDIT: Apparently the band’s being replaced due to Experian, the parent company of FreeCreditReport, forcibly changing the brand name to “FreeCreditScore.com” Here ya go. Oh yeah, sorry about how the video flashes occasionally, I tried my best but I just couldn’t fix it. Deal with it. Lyrics: New Job/Pirate Restaurant Commercial: They say a man should always dress For the job he wants, so Why’m I dressed up like a pirate In this restaurant? It’s all because some hacker Stole my identity Now I’m in here every evening Serving chowder and iced tea Shoulda gone to: Free credit report dot com Yee-haa! I coulda seen this coming at me like an atom bomb They monitor your credit and send you email alerts So you don’t end up selling fish to tourists in T-shirts Offer applies with enrollment in Triple Advantage. Dream Girl: Well I married my dream girl I married my dream girl But she didn’t tell me her credit was bad So now instead of living in a pleasant suburb We’re living in the basement at her mom and dad’s. No we can’t get a loan For a respectable home Just because my girl defaulted on an old credit card If we’d gone to free credit report dot com I’d be a happy bachelor with a dog and a yard. Offer applies with enrollment in Triple Advantage. New Car: Well I was shopping for a new car, which one’s me A cool convertible or an SUV? Too bad I didn’t know my credit was whack ‘Cause now I’m driving off the lot in a used sub-compact. FREE, that spells free- Credit report dot com, baby …
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More Credit Score ArticlesIt can also be because of careless handling by an employee of a company where you used the credit card to make a purchase. The second and more dangerous form of identity theft is when someone steals your identity, and opens up credit card accounts, or cell phone accounts in your name. They can also use your social security number when getting a job or your driver’s license to get a duplicate copy. Yes, you can prevent identity theft.
What Exactly is a Fico Credit Score Composed Of?
What Exactly is a Fico Credit Score Composed Of?
What Exactly Is a FICO Credit Score Composed of?
Your FICO score is a very important item to keep monitored on a regular basis due to the fact that it, in a large part, has a lot to do with getting loans, insurance, even a job and more. As we all know, FICO scores cover a lot of our financial background, but what areas are these? There are five main areas and the percentages may differ slightly between reporting companies. Payment history, amounts owed, length of credit history, new credit, and types of credit are all considered in your credit score.
Payment history holds the most water in terms of FICO scores as the area usually consists of around 35% of a credit score. This factor shows how well an individual has made payments in the past and if there have been any delinquencies along the way. Other items such as bankruptcies will show up under this section. Remember that if any delinquent payments appear on a credit report, time has an affect on the weight of that issue.
The next category is amounts owed. Amounts owed consists of around 30% of the credit score and this category basically consists of what your outstanding balances are and how much credit you have left in your revolving debt accounts. This is looked at in the form of a ratio where it compares balances against the actual amount of money available to you. Remember that opening more accounts will not exactly help you in the long run if you find yourself in this situation as it will affect another category which is the new credit area.
Next, the area involving the length of your credit history takes its position at around 15% of your FICO credit score. This area simply measures all the data referring to how long you have actually been making payments on different types of loans or revolving debts. This has a lot to do with your credit score as it shows the potential lender how much evidence of experience with making payments you can provide them with so that they can, as always, minimize their risk that the borrower may potentially default or not make payments on time.
Now, back to the item regarding opening new accounts to add more credit to your balance and available credit ratio, when a person opens new accounts or even makes new account inquiries, this all goes onto that person’s credit report therefore affecting their score. New credit inquiries consist of about 10% of your credit score. Now some individuals may have applied and obtained new accounts as they improve their credit after a bankruptcy of history of delinquent payments. This situation, if positive, will really help a person’s credit score after the fact. But in most cases it’s best to have the same accounts for longer periods of time.
Last, the types of credit accounts that you are currently making payments on affect your credit report as it consists of around 10% of your credit score overall. The main issue here is that the lenders want to know, first, that you are paying loans off on time, but also, what types of accounts these actually are. An account from a popular electronics store where a person makes payments on a new microwave oven is not the same as a mortgage. FICO scores are adjusted in order to show this difference in your credit report.
If there is one thing to remember, it is that your credit score is one of the most valuable things you can have when applying for a loan and more. Your credit score, however, has much more relevance to your actually getting the job you want or even being able to receive medical insurance in many cases as well. Everyone wants clients, employees and customers who are responsible and who get the job done be it making payments or completing tasks for an employer. If the credit score is not monitored regularly, the negative issues, whether or not they are your fault (i.e. identity theft) that commonly affect individuals’ credit scores may very well take affect. So watch that credit closely and make sure that you are being represented in the fairest of ways overall.
S. Michael Windsor is currently publisher and a writer for My FICO Network. The MCN Online FICO Credit Score Guide is a premier FICO score and credit report information platform that provides individuals with a quality in-depth look at credit scores and reports and the associated products, services and information available today. Visit us today at http://www.myCreditScoreNetwork.com and subscribe to our FREE services.
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Protecting Your Future and Your Capital.
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The same goes for pay stubs you no longer need, bank statements, old tax returns and utility bills. File a police report with the local police department, and if the crime occurred in a different community, you should also contact those local authorities as well. Keep copies of the report after it has been filed. It can also be because of careless handling by an employee of a company where you used the credit card to make a purchase.
