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                           Understanding Your Credit Score

                       The Credit Doctor answers: What does your score mean?

This rating system is meant to develop a snapshot of the risk you currently represent to
a lender. Several parameters in your credit file, including length of credit history,
number of open accounts, loans, mortgages, public records, and others are formulated
to produce a three-digit score between about 300 and 950. There are other scores
used by lenders and insurance companies (some of which are developed by FICO)
such as Application and Behavior scores. These other scores take other information
into account. Usually a lender will use a combination of your credit score with other
factors when determining your risk. They all have the same objective, to determine the
borrower's potential risk. Regardless of whether the score was generated by FICO or a
system based on FICO parameters, they all yield an industry standard three-digit
score. This score places the borrower in one of three main categories (we named the
third one ourselves.)

Prime, sub-prime, and shafted

Prime If your credit score is above 680, you are considered a "prime borrower" and will
have no problem getting a good interest rate on your home loan, car loan, or credit
card.

Sub-Prime If your credit score is below 680, you are "sub prime", and will likely pay a
much higher interest rate on your loan.

Shafted Below 560 is the shafted score. At least that is how most lenders and credit
issuers perceive it. You can still get a credit card but you will likely be hit with a security
deposit or high acquisition fee. In addition to that your interest rate will likely be 22 to
23%. You can forget about most home loans and the majority of new car loans at this
score. Below 560 is no place to be. You will pay much, much more in higher interest
and unnecessary fees. You may even pay more for your insurance rates. A very low
score can even prevent you from getting a job with many companies. If your in this
catagory Click Here

How are credit scores calculated?

The methods of calculating your FICO may differ slightly depending on the credit
bureau. When obtaining your score from one of the Credit Bureaus it is important to
understand that your score does not come directly from FICO. It is adapted to each
bureau and is given its own name:Equifax uses "Beacon", Trans Union uses
"Empirica", and Experian uses "Experian/Fair Isaac." These scores are also referred to
as your "Bureau Scores." We recommend Equifax to recieve your 3 credit bureau
reports. The trusted name in the industry!

Since your score is derived from your bureau data, it will change every time your
reports change. However your score is calculated, it will always take into consideration
many categories of information. No one piece of information or factor determines your
score. As the information in your credit report changes, the importance of one or
several factors may change in your FICO score. Lenders look at many things when
making a credit decision, including your income and the kind of credit you are applying
for. However, your FICO score does not reflect these facts as it only evaluates the
information retained by the credit reporting agency.

To Learn More Click here.

What factors affect your credit score?

There are five factors which are used in credit scoring calculations that determine your
overall credit score.

  • Previous Credit Performance (Payment History) 35% A lender wants to know
    what your payment history is like. Have you paid everything on time, are you late
    on anything now, and so on. Your payment history is just one piece of
    information used in calculating your score, although it can be the very important.

  • Current Level of Indebtedness (Amount Owed) 30% How much is too much? Can
    the borrower pay me and still afford to pay his other bills? Not necessarily.
    Having available credit can actually help your ratio of debt to available credit.
    These are the types of questions that most borrowers want to know and the
    answers are almost as important as your previous credit history.

  • Amount of Time Credit Has Been In Use (Length of Credit) 15% Generally
    speaking, the longer the credit history the better your score. However, this factor
    only makes up 15% of your total score so even young people, students or others
    with short histories can still score high overall as long as the other factors show
    good. If you are new to credit than there is little you can do to improve this part
    of your score. Open an account and be patient.

  • Pursuit of New Credit (10%) Credit is much more popular today. Just look at the
    number of credit card offers you get via the Internet and in the mail. Consumers
    can now shop for credit and find the best terms to meet their needs. Each time
    someone runs a credit check on you, it creates an inquiry.

  • Fair Isaac has changed some of its calculations to account for these new trends.
    Specifically, they treat a group of inquiries - which probably represents a search
    for the best rate on a single loan - as though it was a single inquiry (note: this
    only applies to auto or mortgage loan inquiries.) For example, auto loan inquires
    that are within 14 days of each other only count as one inquiry.

Types of Credit Experience (10%) A healthy mix of different types of credit, installment
loans, retail accounts, credit cards, and mortgage. This score is not normally a key
factor in determining your score but it can help a close score. Its not a good idea to try
and open different types of accounts just to try and make this factor better. It will likely
reduce your score in other areas. You should never open accounts you don't intend to
use anyway.

What type of accounts you have, and how many, can make a big difference. The
optimal ratio of installment versus revolving accounts depends on your profile and
differs from person to person. One factor that seems to have significant influence is
your percent of open installment loans. Too many can lower this portion of your score.
For more information Click here.


Improving your credit score

Now that you know how your score is calculated, you can begin making changes to
your current financial planning. The best things you can do are simple.

Pay your bills on time. Sounds simple, but this is the biggest thing you can do to keep
your score high. Delinquent payments and collections have a major negative impact on
a score.
Keep your balances low on unsecured revolving debt like credit cards. High
outstanding balances can affect a score.
The amount of your unused credit is an important factor in calculating your score. You
should only apply for credit that you need.
Make sure the information in your credit report is correct. If its not, dispute it with the
credit agencies and/or with the creditor directly.
Removing negative items on your credit reports has the biggest impact on your FICO
score. Generally, negative items stay on your reports for seven years but you can hire
a professional credit report repair service such as Lexington Law Firm to do it for you.
You can try to understand the laws for yourself, but we have found it's so much easier
to have someone do it for you. We strongly recommend using Lexington Law Firm,
they are the industry leaders.

"Bad Credit, such as charge offs, judgments, and other negative listings can
be deleted and removed from your credit report legally." - Lexington Law Firm

The Fair Credit Reporting Act (FCRA) allows a consumer to challenge the
information on his credit report on the basis of "completeness and accuracy." When a
consumer files a dispute, the credit bureaus must contact the source of the credit
information (the creditor) and confirm that the information is accurate, verifiable, and
not obsolete. In some circumstances, the credit bureau is required to go beyond a
simple verification of the creditor's own computer record. If, within 30 days, the credit
bureau has not received verification from the creditor, then the credit bureau must
promptly delete the credit listing.

The Cost of Bad Credit
If you are making payments on a car, you are probably paying between $5,000 and
$9,000 more just for having bad credit. This added interest shows up every month in a
higher payment.

The following chart illustrates this:
Bad credit in auto financing can really hurt, but it is nothing compared to the cost of
bad credit when a home is involved. A typical home can cost between $50,000 and
$130,000 more in interest if you are buying the home with bad credit.
How to Repair Your Credit.
We recommend Lexington Law they are a law firm that specializes in credit report
repair and has successfully deleted negative credit for over 300 thousand people
including:

  • Charge Offs
  • Judgments
  • Late Payments
  • Repossessions
  • Collections
  • Bankruptcy
  • And More!

Start Repairing Your Credit Today its Easy and Simple as 123!!
                               
1. Click here to receive your 3 credit reports!

2. Go here to Repair your credit!

3. Protect your Credit and Identity by clicking here!
Would you like to Remove Charge offs, Judgments,
or Other Bad Credit From Your Credit Report and
Raise Your Credit Score?
"Bad Credit, such as charge offs, judgments, and other negative listings can
be deleted and removed from your credit report Legally! "-Lexington Law Firm

You have found the right place! At 700CreditFix.com we offer Free information on
repairing your credit and increasing your FICO scores. Unlike other websites we are
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