What Is A Credit Score And Tips On Raising It
What is your credit score and how to order it. Click Here to order your report
Your score is a numerical rating based on factors that are measured by your willingness to repay loans. The score is calculated from the information that is in your profile which is a record of all your credit activities. This score predicts your credit performance, which means the higher your score, the better credit risk you are.
The FICO score is most the most popular credit scoring system. You can get your FICO score by Clicking Herefrom any of the three main credit agencies. (it is advisable to monitor all three. Equifax (800) 685-1111 Experian (888) 397-3742) Trans Union (800) 916-8800
Since your credit score is from your credit history, there must be minimum history to get an accurate score. Before the credit report can be obtained, you must have at least one account that has been open for six months and has current activity within those six months.
You need to develop a credit history to be eligible to apply for a mortgage. If your score is too low, there are ways you can raise your credit score. However, it is not possible to do this in a short time period. It is very important to employ credit habits that will make sure your credit score stays high at the time that you need it. What are factors that are considered in your credit score?
The credit score is only interested in a borrower’s willingness to pay back the loan. It predicts the likelihood that the loan will get repaid based on the accumulation of the borrower’s past performance and current standing. Such information as savings, income or demographic data like nationality, race, religion, marital status, and gender are specifically left out of the credit profile. It is not meant to measure the borrower’s ability to repay the loan. For that, the lender looks at your debt-to-income ratio .
The credit report does track both the positive and negative activity in your credit history, such as timeliness of payments, current debt balances, length of credit history, types of credit available to you, the number of credit inquiries and any legal action taken against you for non-payment (such as bankruptcy or a lawsuit.) Although late payments will reduce your score, a current history of timely payments can raise it.
Weights are assigned to various factors considered. FICO assigns thirty-five percent of your score to your payment history, thirty percent to your debt level, fifteen percent to the length of time span of your credit history, also fifteen percent to the type of loans such as installment versus revolving, and five percent to your credit score requests. This measures your level of pursuit after new credit.
Your credit score is used to consider you in most applications for credit, loans and mortgages, even insurance or employment. It is very important to maintain a high score and ensure your report is accurate.
How can you raise your score? Raising it takes time, you can raise it by as much as 50 points per year by carefully managing your credit. You should develop positive credit habits to promote good credit history. Make sure you pay everything on time, even your utility bills. Make sure you check all three credit bureaus to make sure everything is accurate, make sure you do not max out your cards, leave an available balance. Obtain all reports annually and make any corrections in writing. Click Here to get your score. You should always continue to re-establish your credit, even after a bankruptcy. Most lenders are concerned more about what happens after this derogatory incident. Continue to monitor all reports and make sure all your corrections are in writing.
You can download your credit reports here Click Here. This article, What Is A Credit Score And Tips On Raising It is released under a creative commons attribution licence.
