Most individuals seeking help improving their credit do so after being denied financing or after it had adversely affected their lives to extend the credit repair process. This is why the internet companies only send out 5 letters a month. Their process will take 1 to 2 years to increase the client's scores.
Get a Free ConsultationMost individuals seeking help improving their credit do so after being denied financing or after it had adversely affected their lives to extend the credit repair process.
Credit reports are not always easy to read. The truth is the credit bureaus want it like that. The less the average consumer understands, the more likely they will not spot or complain about any errors.
Personal Data: This section has identifying and employment information. It will include full name, spouses name, current and former address, date of birth, current and former employers. Although the personal data section does not directly affect the credit score, it is important that this section is correct for identifying purposes.
Accounts/Trade Lines: This section provides detailed information about all credit accounts. Accounts are divided into five categories: “Real Estate, Revolving, Installment, Other, and Collections.
Collection Accounts: Collection accounts are accounts that are seriously past due and have been transferred to an attorney, collection agency or creditor's internal collection agency. As debt is transferred between different agencies, you may see several records on the credit report for the same debt. Only one record should be marked as open at a time.
Public Records: The public information section of your credit report includes publicly available information about legal matters affecting the credit. This could include judgments against in civil actions, state or federal tax liens and bankruptcies.
Inquiries: This section lists details about each inquiry that has been made into the credit history. Details include the name of the creditor or potential creditor who made the inquiry and the date when the inquiry was made.An inquiry appears when an organization such as a bank or retail store requests a copy of the credit report.
Fair Isaac and Vantage Score hold their credit scoring formulas as a close secret much like the formula for Coca-Cola or your grandma’s legendary double chocolate-chip cookies. This can be very frustrating for consumers when they see remarks on the credit report like “too many revolving debt accounts” and not knowing exactly that means.
Fortunately, Fair Isaac and Vantage Score have issued some public information about how they calculate credit scores. Let’s take a look at the various factors: The five categories that determine your score, in order of importance, are:35% Payment History, 30% Amounts Owed, 15% Length of Credit History, 10% New Credit (Average Age of Accounts) and 10% Types of Credit (Mix Of Credit)
Payment History: The top rated factor for both models is payment history. This is because lenders want to know a person’s payment history -- past and present. This category can be broken down into three subcategories. Recency – This is the last time a payment was late. The more time that passes the better. Frequency – One late payment looks a heck of a lot better than a dozen. Severity – The “Hierarchy of madness” so to speak, rest on the logic that a payment 30 days late is not as serious as a payment 60 or 120-days late. Collections, tax liens and bankruptcies are credit score killers.
How much is owed: The score looks at the total amount owed on all accounts as well as how much you owe on different types of accounts (mortgage, auto, etc). Using a higher percentage of the credit limits will worry lenders and hurt the credit score. People who max out their limits have a much greater risk of default.
Utilization: When it comes to revolving debt like credit cards the formula looks at the difference between the high limit and balances. For Example, let’s say you have a MasterCard with a credit limit of $10,000 and you have spent $2,000 of it. This is a 20% utilization ratio. The lower the ratio, the higher the credit score.
