Every year, you are entitled to a free credit report from each of the free credit bureaus. By going to www.annualcreditreport.com, it is possible for you to get access to a credit report from each of the bureaus. This is important, since what is in your credit report can affect your credit score. If you want to keep a good credit score, part of it is making sure that information in your report is accurate. However, you have to realize that, although you are entitled to a free credit report, you are not entitled to a free credit score.
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Why Were You Turned Down for Credit?
Additionally, whenever an “adverse action” takes place due to your credit, the lender is required to let you know what information was used, and you can get a free credit report from the bureau that provided the information. But, that still doesn’t let you know what credit score was used to deny you credit (or give you a higher interest rate). That is about to change, though, when July 21, 2011 rolls around. That’s when a provision in the financial reform bill passed last year takes place.
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Categories: Credit Report, Credit Score
We’ve been looking a little more closely at the factors that make up a credit score recently. So far, we’ve addressed the following:
Together, these three factors account for 80% of your FICO score. The final 20% of your score consists of two different factors, weighed at 10% each: types of credit you have right now and new credit accounts. Even though these factors aren’t weighed as heavily when figuring your credit score, they are still worth paying attention to.
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Categories: Credit Report, Credit Score
If you are working to improve your credit score, it is vital that you know exactly factors influence the outcome. While providers of different financial products and services have their own variations of the credit score, and tweaks to the formula, overall there are some things you can expect. The most important aspects of your credit score are your payment history and your credit utilization. Together, these items account for 65% of your credit score. The next largest chunk is the length of your credit history, which accounts for 15% of your credit score.
Length of Credit History Matters
While the length of your credit history isn’t weighed as heavily as payment history or credit utilization, 15% isn’t something to sneeze at. Indeed, if you are just on the cusp between fair credit and good credit, your history could mean something. The length of credit history is one of the reasons I still have my first credit card — even though it is a student credit card that doesn’t offer rewards, and that has a little higher interest rate than my other cards.
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Categories: Credit Report, Credit Score
Because credit scores are so important in the world of finances, many are interested in figuring out how they can improve their scores. Credit scores represent your financial reputation, and poor financial reputation can result in paying more in interest or paying higher insurance premiums — or being rejected for some financial products and services altogether. There are a number of agencies and others that claim they can help you “fix” your credit score. However, the most important thing you can do for your credit score is to make on time payments.
Your Payment History and Your Credit Score
Because your credit score is meant to be a measure of your credit habits, it is not surprising that your payment history is the most important factor considered in credit scoring models. Indeed, according to FICO, the company that is most prominent in credit scoring, your payment history accounts for 35% of your score. Your credit utilization accounts for 30% of score, and is next in importance to your payment history. Read more…
Categories: Credit Report, Credit Score
When it comes to finding ways to raise your credit score, you may be wondering if you should pay your credit cards down slowly or pay them off all at once. Your FICO score, determined by the Fair Isaac Corporation, is determined based on a collection of your repayment history for credit and loans. Knowing how to handle each credit card to best impact your FICO credit score will give you the upper hand in raising your score and improving your credit overall.
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Categories: Credit Score
