Credit report scores tell lenders who you are

Credit Report Scores
How to See and Improve Them

Credit Report Scores - Who Determines Them?

There are three major credit reporting agencies: , , and .

Each of these credit reporting agencies receives information from credit grantors such as credit card companies, stores granting credit, utilities, mortgage companies, and banks. They compile your credit history and compute your credit report scores.

They provide your history and credit report scores to others who have a genuine interest in your credit worthiness.

Credit Report Scores - Computing Then Insufficient funds?

Your credit report scores are based on factors that appear in your credit reports. Credit report scores are computed based on a model developed by Fair Isaac Corporation and are typically know as FICO scores. They help lenders determine the risk of extending credit to prospective or existing borrowers.

The following general factors are considered:

  • Bill payment history -- 35% of your FICO score (Good: on time and for the full amount)
  • Debt relative to your credit limit -- 30% of your FICO score (Good: non-mortgage loan payments less than 5% of gross income, few installment loans, Bad: many debts, maxed out credit cards)
  • Length of credit history -- 15% of your FICO score (Best, entire credit history of 7 years shows no negative reports)
  • Types of credit -- 10% of your FICO score (Good: mortgage, car loans, Bad: high interest credit card debt)
  • New credit -- 10% of your FICO score (Bad: many rejected applications, new accounts, or credit inquiries)

All these factors are considered in computing your credit score.

Your credit report contains your credit score as well as personal information, credit payment history, credit inquiries made when applying for credit, collections, as well as public record information from courts such as backruptcies, foreclosures, wage attachments, liens and judgments.

What's Not Allowed in Determining Credit Report Scores

The Equal Credit Opportunity Act (ECOA) prohibits certain factors from being used in determining your credit report score:

The Equal Credit Opportunity Act provides actions for you to take if you suspect unauthorized factors are being used to deny you credit.

You should also know about 16 illegal collection actions you may be subjected to during the debt collection process.

Credit Report Scores - How to See Them

You should know that you can get a free copy of your credit report at www.annualcreditreport.com, or call 877-322-8228, or complete the Annual Credit Report Request Form and mail it to: Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281.

But, your credit report does not contain your credit scores. To get your credit scores, you will have to obtain them from each of the credit reporting agencies or from a company that combines the information.

Each of the three credit reporting agencies can provide you with a one-time copy of your credit report. Equifax, Experian, for example, will provide your report online for a fee of $9. Trans Union charges from $7.50 to $9 for your credit report.

All three credit reporting agencies will also provide a one-time copy of a "3-in-1" credit report. This contains your credit reports and your credit report scores from all three reporting agencies. Trans Union charges $34.95 while Equifax and Experian each charge $39.95.

Another group, Online Credit Reports, provides unlimited access to your 3-in-1 credit report, shows your credit scores, monitors your credit reports for changes, and provides identity theft protection.

Credit Report Scores - Improving Then

A good score helps you get the best loans. The loan officer will be glad to see you because you will:

  • Qualify for a larger loan
  • Get a loan faster
  • Get the best interest rates.

There are steps you can take to improve your score:

 

First: Become a Good Credit Risk

The first thing you must do is take action to become a good credit risk. Pay your bills on time and do not use charge cards unless you can always make the required payments on time.

If you have a credit card debt problem there are some steps you can take to get your finances back in balance:

  • Pay down debt on credit cards you've maxed out in order to reduce your ratio of debt to borrowing power.
  • Reduce your overall debt--especially high interest credit cards.
  • If your home has more value than your current debt load, learn why you should consolidate. Then, think seriously about transfering high interest debt to a lower interest consolidation loan
  • Make your rent or mortgage payments on time
  • Think differently while shopping using these tips for spending money wisely
  • Establish a personal budget
  • Obtain guaranteed Mastercard to establish good track record
Second: Remove Old or Inaccurate Items from your Credit Report

You must also remove old or inaccurate items from your credit report. You can use many of the techniques for overcoming identity theft.

Methods that Help You Dispute Items on Your Report

    For a Powerful One-Time Upgrade of Your Credit Report

    Better Credit Pros

    Sruveys have shown that 4 out of 5 credit reports have at least one inaccurate item listed. If you need help clearing up your credit report, the Better Credit Pros can help.

    You already know that errors on your credit report can have a significant and troubling impact on your life. Among other things, you may be denied a mortgage, car loan, credit card or even employment because of these errors. But you do have rights to get your credit report cleaned up.

    Do It Yourself Credit Repair

    The Attorneys Guide To Credit Repair. describes how a professional credit repair attorney consistently defeats the credit bureaus. His methods can add 257 points or more to your credit score.

    This resource shows you how to improve your credit score within 45 days. You'll learn step-by-step:

    • How to remove Chapter 7 and Chapter 13 bankruptcy from your credit report using my 2 step bankruptcy removal technique anyone can follow.
    • How to remove charge offs and slow pays from your credit report using my "Prove It Or Remove It" technique.
    • How to remove judgments and liens from your credit report using a critical flaw in the court system.
    • How get your creditors on your side, so they're actually willing to help you by removing late payments from your credit report.
    • How to reduce your debts to a fraction of what you owe by mailing a simple one page letter to your creditors.

    This resource will help you improve your own credit score.

    This page contains valuable information.
    You may want to for future reference.

    Related sites page 1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  21  22  23  24  25
    Misspelled Words  Contents

    Copyright © 2005 Robert Sherman

    What Credit Cards Can I Get?
    Features Credit Report Information
    Non Chex Systems Banks
    Get a Checking Account While on Checksystem
    How to Obtain an Experian Credit Report
    Free Forclosure Listing
    Pay Day Loan
    Student Credit Cards
    Refinance Your Home Mortgage
    How To Use Good Debt
    Credit Card Companies And The Credit Reporting Agencies They Use
    How Do I Get A Free Experian Credit Report?
    Second Chance Auto Loan
    Second Chance Bank Account
    Guaranteed Mastercard