A debtor’s credit score is a three-digit number calculated by the credit bureaus in attempt to specify his/her paying capacity and prevent themselves from dealing with people that might not be able to handle the credit they are requesting and get into delinquent credit card debt. The credit score is based upon the information you have on your credit report (basically, the creditors could be using the Report itself to make decisions but they say the credit score to be a much more convenient means, which also doesn’t involve any subjectivity in making the decision). The minimum credit score is 300, the maximum – 850. The most widely used credit score is the FICO (calculated by the Fair Isaac Company).
Different criteria determine your credit score. There is a special formula that gives different weight to different points of your credit history bong da truc tiep . Fair Isaac Company possesses all the information necessary for calculating your score – and even though it is considered proprietary, we are aware of what parts of your credit report exactly are used in the calculation.
Payment history. 35% of your credit score depends on how accurately you used to pay your bills for the previous loans. Other parts of your payment history that will be able to affect your credit score include: the records of late payments, collections and bankruptcies. The more recent is the delinquency recorded on your payment history, the more significant is the effect that it produces on the credit score.
Outstanding credit card debt amount. 30% of your FICO credit score depends on the outstanding credit card debt amount that you currently owe. The credit score will lower with the growth of your “credit utilization” showing, which stands for the outstanding debt amount compared to your current credit limits. It will be best if you credit card balances do not exceed 30% of your total credit limit.
The length of your credit history. 15% of your FICO credit score depends on how long your credit history is. Basically, the creditors get a better chance to understand your spending habits if your history is a pretty long one. The longer is your positive credit history, the higher is the score. You are also advised to keep the accounts that you’ve been using for a long time open – this will have a positive impact on this showing.
Inquiries. 10% of your FICO score depends on the number of credit inquiries you made so far. The more often you request loans, the lower is your credit score, since too many applications usually mean that the potential debtor is trying to take up a loan that might be too big for him/her or is living through some harsh financial hardship. Fair Isaac Company pays attention only to the number of inquiries made within the past year, though your credit record reflects all of them that you have made within the past two years.
Mixed credit. Another 10% of your FICO credit score depends on whether you have the experience of managing different kinds of credit accounts or not. Possessing one account or multiple accounts of the same type will lower your credit score. However, you are not recommended to open new accounts only in order to improve this criterion, since this may result in the appearance of unwanted difficulties in credit management.
Every day more and more people find themselves suffering with bad credit. Having bad credit makes it nearly impossible to make any major purchases such as purchasing a car, getting a credit card, renting a car an even buying a home. Below are some easy tips for bad credit repair. These tips will help you to repair your credit status bringing your total credit score up enough to where you’re able to do things again.
Many people do not realize just how low their credit score actually is until they go apply for credit somewhere. They sit down at the table awaiting to get their brand-new car only to find out that there had to be stuck with high interest rates due to their low credit score. Well there are ways to boost your credit score. Bad credit repair is easier than you think. By using the right credit repair methods for your situation you can help to reduce your level of debt over a period of time while at the same time increasing your credit.