Credit Repair can Start Today-
and You Can Start To Improve It On Your Own...
In order to repair your credit, or to start proactive action toward improving your credit score, the first step is to understand what your credit score is...
Your credit score is a 3-digit number that may be referred to as your FICO score (an acronym for Fair Isaac Corporation).
This is the most utilized method used for credit scores since the Fair Isaac Corporation developed the credit score model and is used by many financial institutions.
As already mentioned, credit scores are sometimes called FICO scores or FICO ratings, although it is important to understand that your score may be tabulated using different software.
These calculations are derived from research combined with comparative mathematics. You can compare it to health insurance and how rates improve with a clean bill of health—this is also true with your credit score. It’s a comparative analysis.
Health insurance companies ask specific questions about your health, your lifestyle choices (such as smoking) and use these bits of information to calculate the risk they’re taking by insuring you. This is based on your personal history.
Studies have shown, for example, that smokers tend to be more prone to serious illnesses and so require more medical attention. If you are a smoker, you will most likely face higher insurance premiums because of this.
Similarly, credit bureaus and lenders often look at general patterns. People who assume several debts have a history of lower repayment. That’s a part of why your credit score may suffer due to numerous debts.
What can you do today to begin improving your score?
First, you can begin by ordering your credit report and take a look at your own history. Since credit reports give you the information that goes into the analysis and numbers which calculate your score, you now have the information necessary to begin the process to improve it.
Your Free Credit Report From Credit Bureaus:
You can request at least one free credit report per year. You can get this credit report through the Internet at www.annualcreditreport.com.
Click here to go to the FTC (Federal Trade Commissions Site)
to request a free copy. This link takes you directly to the FTC credit report link and this is the only authorized source approved by the FTC to get your free annual credit report under federal law.
What lowers my credit score?
There are many different components that go into a credit score, and here are some of the most common things that can hurt your score, or lower it:
1. Overextended Credit: If you have too much debt accumulated (through credit cards, credit lines, loans, and debt), this contributes to a lower score. This is mainly based on "debt-ratio." It's not based on income, it's based on how much of the money and the ratio of debt you have.
2. Late Payments: Late payments can often be reported to your credit report and will affect your credit rating. Even if the late payment does not go to a collections agency, but has been reported, this can affect your score.
3. Bills turned over to collections: Bills that have been turned over to collections are reported and will stay on your record unless you become proactive and work with all parties to rectify the report.
4. Bankruptcy: Bankruptcy is a seven year sentence of shot credit. This will continue to appear on your credit report and will directly (and substantially) reduce your score.
5. Some forms of debt consolidation: Be careful when approaching debt consolidation to get out of debt. The best method to wipe out debt is on your own. Although some debt consolidation maybe the only means to correct your situation, approach with caution. Be sure to fully understand how this going to affect your score and what fees are charged.
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