Myths_And_Truth_About_Credit_Score by hashournonos

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									Title:
Myths And Truth About Credit Score.


Word Count:
324


Summary:
Credit score is the key factor determining approval of almost any type of credit. It is based on the
information contained in your credit report files. The widely used FICO score was developed by Fair Isaac
Corporation, and it is a formula which assesses your potential credit risk.


The information used to calculate credit score can be broken down into five major parts. Your payment
history with banks and other lenders will account for 35% of the score, the amount of money...



Keywords:
credit,score,improve,increase



Article Body:
Credit score is the key factor determining approval of almost any type of credit. It is based on the
information contained in your credit report files. The widely used FICO score was developed by Fair Isaac
Corporation, and it is a formula which assesses your potential credit risk.


The information used to calculate credit score can be broken down into five major parts. Your payment
history with banks and other lenders will account for 35% of the score, the amount of money you owe for
30%, and the length of your credit history for 15%. New credit and a statistical assessment of how healthy
your credit mix is will both account for 10%.


Credit score is not based in any way on the following information:


- references to debt management or credit counseling programs.
- person’s marital status.
- current employment status, including how long with the same employer.
- credit report inquiries made by you, employers, insurance companies, or banks if made without your
knowledge.
- what interest rates are charged on your credit cards, etc.
- public assistance received.
- person’s age.
- child or family support received.
You can increase your score by:


- always paying bills on time.
- paying off or reducing credit card and other debt.
- keeping old, unused credit cards, departments store cards and other “revolving” credit accounts open, even
if you don’t use them.
- not applying for credit very often.
- correcting mistakes on your credit reports.


Banks decisions are made according to their own standards.


While the majority of lenders use credit score as a key factor in approving credit, other facts play their parts
as well, among them: your income, employment status and length of time at present address, to name a few.
Each bank has its own standards. What score is acceptable for a particular loan or credit product depends
solely on a lender. The person’s credit score might not be high enough to get credit with one bank, and
perfectly acceptable with another.




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