If you want to repair your credit you will need to know about credit scores. A credit score is a number representing the creditworthiness of an individual based upon the likelihood that this person will pay his / her obligations. It is based upon a mathematical and statistical analysis of many considerations including the records contained on a credit report, both negative and positive information, the quantity of credit available vs. the amount of credit used and open accounts. Increasing your credit score is crucial to credit repair.
The credit score most frequently used in the us is the FICO score. The word FICO is short for for the Fair Isaac Corporation, the industry publicly traded corporation. You’ll find it under the symbol “FIC”. The Fair Isaac Corporation established the first credit scoring system in 1958 and the first credit scoring system for a bank credit card in 1970. While there are more companies that also do credit scoring the FICO score is still the most widely accepted. Suitable credit repair can improve your FICO score.
Points such as late payments, financial challenges previously, current amounts of credit limits compared to credit used are the objective standards used to validate a credit score. Things such as race, gender, ethnicity and marital status are not regarded. The FICO score is regarded to be an unbiased representation of an individual’s creditworthiness. It is possible to increase your FICO score if you take steps to repair your credit and ensure that your credit report does not contain any false or misleading information.
Through the use of credit scores a lender will make the decision on whom they will extend credit to, how much the interest rate will be and what the credit limits will be. They may also use credit scores to decide if they will want more collateral or require a more extensive income and asset verification. Improving your credit rating score can increase your chances of getting credit.
If you wish to repair your credit rating it is crucial to check the current score from all of the three major credit reporting agencies, Equifax, Experian and TransUnion. The scores from each of the three companies will differ according to the different statistical methods they use, the data used and how everything is weighted. Most lenders will take an average of the three or just pick one depending upon their own in-house regulations.
Just be sure you are not overspending and using too much of your available credit so that your expenses are in line and ensure that your payments are made on a regular schedule. A major factor in credit scoring is a comparison between available credit and credit used. If you wish to improve your credit rating consider getting approved for a higher limit on your credit yet don’t use much of it.
The time of your credit history, any outstanding revolving credit lines or credits cards and any credit applications count towards your credit rating. Every inquiry into your credit will count against you so be wary of applying for credit or allowing others to run your credit. Also if you choose to stop using a credit card do not cancel the account but just put the card away or destroy it. If you cancel the account it will count against you on your credit score. As you are repairing your credit consider these things.
You’re able to fix your credit score for the better within half a year to a year with just a little work and consistency. Pay your bills regularly, do not apply for credit unless you absolutely must and utilize the credit you do have infrequently. You will be able to repair your credit and start your credit life over.
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