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Credit-bureau's analyze a borrower's
credit history considering numerous factors such as:
Payment History | Amounts Owned | Length of Credit History | New Credit |
Types of Credit
Credit Inquiries
Payment History
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Account payment information on specific types of accounts (credit cards,
retail accounts,
installment loans, finance company accounts, mortgage, etc.)
Presence of adverse public records (bankruptcy, judgments, suits, liens,
wage attachments, etc.),
collection items, and/or delinquency (past due items)
Severity of delinquency (how long past due)
Amount past due on delinquent accounts or collection items
Time since past due items (delinquency), adverse public records (if any),
or collection items (if any)
Number of past due items on file
Number of accounts paid as agreed
Amounts Owed
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Amount owing on accounts
Amount owing on specific types of accounts
Lack of a specific type of balance, in some cases
Number of accounts with balances
Proportion of credit lines used (proportion of balances to total credit
limits on certain
types of revolving accounts)
Proportion of installment loan amounts still owing (proportion of balance to
original loan
amount on certain types of installment loans)
Length of Credit History
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Time since accounts opened
Time since accounts opened, by specific type of account
Time since account activity
New Credit
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Number of recently opened accounts, and proportion of accounts that are
recently
opened, by type of account
Number of recent credit inquiries
Time since recent account opening (s), by type of account
Time since credit inquiry (s)
Re-establishment of positive credit history following past payment problems
Types of Credit Used
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Number of (presence, prevalence, and recent information on) various types of
accounts
(credit cards, retail accounts, installment loans, mortgage, consumer
finance accounts, etc.)
Please note that:
A score takes into consideration all these categories of information, not
just one or two.
No one piece of information or factor alone will determine your score. The
importance of
any factor depends on the overall information in your credit report.
For some people, a given factor may be more important than for someone else
with a
different credit history. In addition, as the information in your credit
report changes, so
does the importance of any factor in determining your score. Thus, it's
impossible to say
exactly how important any single factor is in determining your score - even
the levels of
importance shown here are for the general population, and will be different
for different
credit profiles.
What's important is the mix of information, which varies from person to
person, and for any
one person over time. Your FICO score only looks at information in your
credit report.
However, lenders look at many things when making a credit decision including
your income,
how long you have worked at your present job and the kind of credit you are
requesting.
Your score considers both positive and negative information in your credit
report. Late payments
will lower your score, but establishing or re-establishing a good track
record of making payments
on time will raise your score.
There are really three FICO scores computed by data provided by each of the
three bureaus
Experian, Trans Union and Equifax. Some lenders use one of these three
scores, while other
lenders may use the middle score.
Below is a chart that shows the breakdown of the FICO scores across the
nation.
Frequently Asked Questions (FAQs)
How can I increase my score? While it is difficult to increase your score
over the short run,
here are some tips to increase your score over a period of time.
Pay your bills on time. Late payments and collections can have a serious
impact on your score.
Paying off Collections or Judgments will not raise your score right away but
will help your score
over time.
Do not apply for credit frequently. Having a large number of inquiries on
your credit report can
worsen your score but only by 2 - 15 points.
Reduce your credit-card balances. If you are "maxed" out on your credit
cards it will affect your
credit score negatively.
If you have limited credit, obtain additional credit. Not having sufficient
credit can negatively
impact your score. 3 - 5 credit cards is a good amount.
Transferring money from an old credit card to a new one can cause your score
to drop.
Try transferring balances to existing accounts and ask the CC company for a
better\lower rate.
What if there is an error on my credit report? If you see an error on your
report, report it to
the credit bureau. The three major bureaus in the U.S.,
Equifax.com Equifax
(1-800-685-1111),
Transunion.com
Trans Union (1-800-916-8800) and
Experian.com Experian (1-888-397-3742)
all
have procedures for correcting information promptly. Also, the three major
credit bureaus have
procedures and telephone numbers for resolving credit disputes.
Alternatively, we can help you
correct these problems as well.
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