Credit Scores: How Are They Calculated?
Copyright 2006 Edward Vegliante
Most people know that credit scores determine what and how much you can borrow from lenders, but very few are actually knowledgeable about how credit scores are calculated. When you attempt to borrow money from a financial institution or to obtain a credit card, the financial companies retrieve a copy of your credit report, which contains a score that qualifies (or disqualifies) you for the loan or line of credit.
Credit scores range from 340 to 850, and are used to determine the risk lenders take on when they give you money or credit. An individual with a credit score of 480 will pose a much larger risk to the lender than an individual with a credit score of 700. If you don't know your credit score, it might be a good idea to find out.
The three credit bureaus - Equifax, Transunion and Experian ? use a special type of software that uses the information in your credit report to generate a numerical score. Credit scores are sometimes called "FICO scores" because the first credit score software was produced and distributed by Fair Isaac Corporation?FICO.
Credit scores are calculated using the following information:
35% Payment History
30% Amount Owed
15% Length of Credit History
10% Types of Credit Utilized
10% New Credit Obtained
Payment History
Your payment history encompasses all of your past credit accounts ? including loans, mortgages, financing and lines of credit.
It will include the accounts that you have "paid as agreed"; negative accounts and collections; and delinquent accounts. Delinquent accounts will show how many accounts are past due, the amount of time that the account has been past due and how much time has elapsed since you've had a past due payment.
Amount Owed
The part that includes the amounts you owe will include how frequently you pay down your credit, how much of your revolving credit lines you've used, and the total number of zero-balance accounts. This is used to determine how frequently you pay off your debts and how much you continue to accrue as time goes on.
Length of Credit History
Your credit score will also reflect how long your credit report has been tracked and how long it has been since you've last opened an account. The longer your credit report is tracked, the higher your credit score will be as along as you continue to make payments and to avoid collections.
Types of Credit Utilized
There are many more types of credit than just credit cards. Your credit history encompasses mortgages, auto loans, business loans and all types of financing.
When you've used several different types of credit ? rather than just revolving credit, such as a credit card ? your credit score will be higher.
New Credit Obtained
New credit refers to accounts that you have opened or paid off within the last six months. New credit doesn't hold as much weight as older accounts because you've had less time to pay (or not pay).
Credit scores are generated by all three credit bureaus, and you might have three very different credit scores. The three bureaus use different ways of calculating credit scores, and one bureau might have more information than another. It is up to your lenders to report positive or negative credit, and if they report it to only one company, then it will not show up elsewhere.
.
Find links to secure online credit card applications.
No More Excuses; Fix a Credit Report for Free
(ContentDesk) July 27, 2006 -- Creditrepairplan.com announces it is offering credit repair for free, thats right, free. No cost, no obligation and no more excuses not to fix your credit yourself. Credit bureaus often make mistakes within credit reports. Some studies have shown that as many as 70 percent of credit reports have some kind of error on them. Who pays for an error on your credit report? You do, says Kim Kellish, owner of creditrepairplan.com. Ms.
Kellish went on to say, The credit bureaus know that there are errors and it is not always their fault. They report what is reported to them, so if an error occurs at the original creditor then it is on your credit report. This can and does cause significant negative effects on your credit score and you are then perceived as a higher risk to future lenders. When, in fact, that may not be the case at all. Many of these errors are easy to fix, getting the message through to the credit bureau is a different story though. Many...
No More Excuses; Fix a Credit Report for Free
Credit report > No More Excuses; Fix a Credit Report for Free
Get A Truly Free Credit Report Every Four Months
There is no need to pay for a credit report. You can get a free credit report just by going to annualcreditreport.com or by calling 1-877-322-8228 toll free. You can also print out an online form and mail it. Postage would be the only cost you would ever incur.
The federal government stepped in and required the three major credit bureaus in the US to provide a free credit report to everyone. Equifax, Experian and TransUnion are obligated to provide you with a free report once every year.
However, you must ask for it.
Merely go to the website every four months and ask one of the credit bureaus for a free report. Why would you do it any other way?
Do not make the mistake of going directly to the credit bureaus and asking for a free report. You can only get a truly free report from the above sources. You may see other offers for free credit reports, but they are not really free.
If you sign up for a credit monitoring service...
Credit report > Get A Truly Free Credit Report Every Four Months
How to Fax the Credit Bureaus For Faster Credit
Insider Etiquette: How To Stay in the Credit Bureau's Good GracesSeveral of the credit bureaus have opened up their fax lines, (namely, Equifax and Transunion) but only to select consumers--only those a recent "confirmation number" or tracking number from a current credit report. In our ebook "Improve Your Credit Score In 24 Hours" we give you the fax numbers that credit bureaus keep secret. Since January 2003, we've sold 30,000 copies-this tremendous success has led to a high volume of unsolicited faxes from consumers, enough so that they have tightened their rules. If you are in possession of a credit bureau fax number, either from us or from communication with a credit bureau, we'll outline the proper fax methods for you.The ABCs of Faxing Your Way to Better Credit:?Absolutely never send unsolicited faxes. You must include a confirmation number from a current credit report to fax the credit bureau....
How to Fax the Credit Bureaus For Faster Credit
Credit report > How to Fax the Credit Bureaus For Faster Credit
What Makes up my Credit Report?
Many of us may not know our credit score, some may not even be aware of a credit score, that is until they attempt to apply for credit of some sort, be it a credit card, mortgage or apartment rental. To most, they view our credit score as a one dimensional number, nothing more, hence the reason it is so important for us to become more aware of what our credit score is. People see our credit score as an indication of who we are as people. Frankly, I don't feel that I should be judged for not having paid a bi during my college years, but unless we become proactive regarding our credit report, that is how it will be.
Let's consider the elements that make up our credit report and ultimately decided our credit score. The first factor is payment history.
Basically do you pay your bills on time. The second factor they look at is your outstanding debt. How much do you owe and to whom do you owe it?
The third factor is length of credit history. I feel this category is...
Credit report > What Makes up my Credit Report?
Oshkosh Selects ITTIA Database Solution and Joins Club ITTIA
Oshkosh, known for making some of the toughest trucks in the world, selected an ITTIA database solution and joined Club ITTIA, the ITTIA database community. Oshkosh is using db.* for ARM/Linux in an upcoming version of their A3 HEMTT (Heavy Expanded Mobility Tactical Truck) military vehicle.No matter if you need to plow your way through Saharan sands or Arctic snow ? Oshkosh offers a vehicle. The company makes heavy-duty vehicles for the defense, fire emergency and commercial industries. Oshkosh's...
Credit Scores: How Are They Calculated? trucks Credit report Oshkosh Selects ITTIA Database Solution and Joins Club ITTIA
Credit report > Oshkosh Selects ITTIA Database Solution and Joins Club ITTIA
Credit Scores: How Are They Calculated? Credit report used cars
Credit Scores: How Are They Calculated?
Credit Scores: How Are They Calculated?
Credit Scores: How Are They Calculated? Credit report
Credit Scores: How Are They Calculated?
House Training A Dog - The Simple Way
The puppy is new and oh so cute. You cuddle with it every day and love to chase it around the yard or play tug of war with the stuffed animal that, in a year will probably be missing most of its limbs. However, all is not fun and games in the house with the new puppy. Now comes the hard part, house training the dog.
As the new puppy does one of two things to relieve him/herself in the middle of your new white carpet you find yourself wondering why it is so difficult for the dog...
Credit report > House Training A Dog - The Simple Way
Credit report
This page loaded in 0.02399 seconds.