Credit scores

Credit Score: What Is It and How to Get Yours For Free

In the United States, your credit score is everything. It is something that you should take care of or if you don’t, getting a phone, cable or gas line hooked up in your home can be difficult to do. There are also certain companies that take a look at your credit score first before they even hire you. Even if you are qualified to do the job, a low credit score can ruin it all for you.

Your credit score is also analyzed by creditors, such as banks and credit card companies. Just try to imagine that you need to get a loan to start your own business, with a low or bad credit score, you have a lesser chance of getting that loan approved or you may get it approved but with high interest rates. The same thing goes when you apply for a credit card. Credit card companies or banks that issue credit cards will first take a look at your credit score before they can get your application approved. A high credit score means that you have a greater chance of getting the best credit card deals with a lot of features and also with low interest rates for your every purchase using a certain credit card.

Even if you are applying for a mortgage, a car loan and other kinds of loans, your credit score will play a very important role in it. This is why it is very important for you to have a high credit score and maintain it that way or increase it.

First of all, you have to understand what a credit score actually is. A credit score will represent a three digit number from 300 to 850. This number will represent a calculation of the likelihood of whether you will pay their bills or not. This means that if you have a high credit score, creditors will be sure that you will pay your bills or your loan.

In the United States, FICO or Fair Isaac Corporation is the best-known credit score model in the country. They calculate your credit score using a formula developed by FICO. The system is used primarily by credit industries and consumer banking industries all across the country.

Credit scores are calculated in the following factors:

• Punctuality of payments – This will be 35% of the calculation. If you pay your bills on time or before the due date, your credit score will tend to be higher.

• Capacity used – This will amount to 30% of the calculation of your credit score. It will contain a ration between the current revolving debts to total available revolving credit. If you use your credit card and if you don’t use its entire credit limit, you will get a higher credit score.

• Length of credit history – This will amount to 15% of the calculation of your credit score.

• Types of credit used – This can affect 10% of your total credit score.

• Recent search for credit or the amount of credit obtained recently – This will amount to 10% of the total calculation of your credit score.

Surprisingly, not many people know their credit score and often end up wondering why they got denied for their loan or credit card application. You can easily obtain a copy of your credit report by requesting for it from FICO or from the credit reporting agencies. They will be able to provide you with a free calculation of your credit score every year. It is also a great way to find out if there are any errors in your credit report that may be causing you to have a low credit score. You can request it to be fixed in order to let you have a higher credit score than before.

Always remember that your credit score is an important factor of your life. Keep it high and you will get better deals on loans, and credit cards.

Free Credit Report: Know About Your Credit Score For Free

When it comes to applying for a loan, applying for a credit card and applying for certain jobs, you will see that all of these things have one thing in common. All of these actions will require you to have a good credit score in order to qualify.

A credit score or a credit rating is what banks base their decisions in approving you for the loan of for a credit card. Sometimes, there are companies that also look at your credit rating in order for you to qualify for a certain job.

Your credit report will contain all your credit history. It will show if you have been paying your loans and credit card bills on time and it will also contain information about your monetary judgments, your tax liens and even bankruptcy.

It is a fact that many people don’t know what their credit score or credit rating is. Because of this, they will often get negative credit reports because of applying frequently for credit cards and loans and getting rejected because of bad credit rating.
Because of this reason, it is important for you to know your credit rating. This is why it is necessary for you to obtain your own copy of your credit report in order to know about your credit history and know if you have a good credit rating or a bad credit rating.

You obtain a copy of your credit report through credit reporting agencies. The credit reporting agencies makes your credit report and gives you your credit score. They make their reports based on the creditor’s reports about your credit.

If you weren’t paying your credit card bills or your loans on time, the creditors will give you a negative credit report to credit reporting agencies. Sometimes, a bad score can be caused by errors on the report. For this reason, it is very important for you to find out about your credit history by applying for a credit report from credit reporting agencies.

The document will contain all kinds of necessary information about your credit payment history. It will contain your identifying information, such as your name, address, current and previous address, date of birth, national security number, your previous employer, and also your spouse’s name if you are married. It will also contain your credit information with banks, credit card companies, retailers and also other lenders.

The credit report can be viewed by creditors in order to determine if you are worthy of getting approved for a loan. It is also a document that can be analyzed by landlords and employers for your credibility.

Your credit report will be provided by the three major credit bureaus in the United State, namely; Equifax, Experian, and TransUnion. The reports can be ordered at the same time. Also, these reports can be obtained for free, once a year. There are also companies that provide credit reports for free. However, these companies use their own system and are usually inaccurate.

So, if you haven’t applied for a credit report before within the year, you can obtain one through the three major credit bureaus in the United States. You can even order all three credit reports for free. By doing this, you will not only know about your credit history and credit rating, but you can also compare it and know about certain errors made.

Free Your Mind and Check Your Credit Scores Online

When people hear that some items are sold for credit, they would leap for any opportunity that will come their way. It’s not surprising to note that there are a lot of people who do not have enough cash on hand to handle all their expenses. And getting them on credit is the best possible way.

But it should not just end there; you have to know that when you get things on credit, you have the responsibility to repay what you’ve purchased, only it is at a later time like the end of the month. The lender expects that you make payments on a specific date, which you should not forget or overlook. Otherwise, you will be marked as a person with a bad credit reputation.

With how things are going now, credit is the best option for almost anybody, so you should exert more efforts to maintain a good credit reputation if you want your credit applications approved.

Once you’ve started to build your credit history, you must see to it that you maintain a high credit score. This will be of great use when you apply for loans, mortgage, credit cards, and other credit transactions.

There are three agencies responsible for gathering people’s credit reports. Most establishments offering credit transactions rely on these agencies for credit reports of different people. So you have to make sure that you’re building a good report, and not a bad one.

All of us are just human beings that constantly make mistakes, but it is not a valid excuse for not paying your dues on time. For those who already have a bad credit reputation, you can re-establish it through credit repair. And it is equally important to keep track of your credit scores contained in your credit report, at least on an annual basis.

It is not that difficult nowadays to keep track of your credit report. In fact, there are now services online which offer free credit score information directly from the three credit reporting agencies or bureaus.

The Internet is a great tool to obtain credit information. If you have an Internet connection, you don’t need to go to physical offices of these credit agencies just to check your credit report.

TransUnion, Experian, and Equifax are the three major credit reporting bureaus/agencies responsible for gathering your credit information. Different websites have different offers. You can find sites which offers a free copy of your credit score. The credit scores are simple to understand, and some even provides detailed explanations to help you in understanding your credit score better.

Getting a copy of your credit report online is the most accessible way; and it is delivered to you quickly, securely, and safely. With the Internet, you can have access to your credit report and credit score twenty-four hours a day.

Get a copy of all your credit reports in the three agencies for not more than forty dollars. Though it might cost a little, it helps a lot in keeping track of your credit standing especially if you need to make a loan in the future. Aside from that, you can easily see and check if there are mistakes in your credit report, so you can report it to the agency fast and easy.

Credit scores are important, and it’s just like getting a high grade when you were still studying.

High FICO Score on Credit Report Obtains Positive Responses

Are you living life in the fast lane? And tired of keeping up with all your expenditures? Life is like that, sometimes you get what you want, and sometimes you don’t. And since this is a fact of life, is there anything you can do to improve your life?

Don’t be desperate; it’s not the end of the world. It’s but natural to incur expenses as you go on with your daily life. Most especially now that almost every price of an item you need is soaring high. This is one reason why people find loans, credit cards, and other credit transactions more attractive.

Transactions involving credit is not that easy to apply for, you will need to have a good credit rating based on your credit report. Your credit report holds your credit score, or formally known as the FICO score.

The FICO score of each person applying for credit is very important. This is usually the deciding factor for any company to approve your application for credit. This will determine whether you’re eligible or not.

You should not disregard your FICO score. This means that from the very start, you should have handled all your credit transactions in a good manner and pays your bill on time. If you’ve been living your life like this, then you can expect a high FICO score. Having a high credit score means that you have great chances in getting secured loans, credit cards, and the like.

A high FICO score indicates that you’re a low risk for creditors, which means that once they extend you a loan (or any credit transaction), you can pay off your dues on time.

FICO scores have different ranges. If you’ve scored 500-559, it means that you should start improving your score. 560-619 scores have great troubles in obtaining credit, and for you to have a decent score, you must get a score of 675-699. Scores from 700-719 can expect a favorable response when it comes to financing terms. For people having FICO scores from 720-850, a big round of applause for you, because you’ve attained the best score of all; you will certainly have no trouble in applying for any credit term.

Aside from the different score-range, the FICO score is divided into five categories: the payment history, the credit history’s length, amounts owned, new credit, and the type of credit that you have used. These categories have a direct relation to your credit scores.

Your credit report will contain information such as retail accounts, credit cards, mortgages, installment loans, unpaid accounts, bankruptcy, and other pertinent information regarding your history (on credit). You can’t lie because the records are pieces of evidence which proves your eligibility.

However, there are also times when some information contained in your credit report are not that accurate, so you need to check with the bureau along with your supporting papers at least once every year to have your records updated.

You are free to visit the bureau. In fact, three known bureaus gather credit reports. They are Experian, Equifax, and TransUnion.

The FICO score is your credit score, and remember, you must get a high score to have any application on your favor. One of the best ways to cope with your expenditures is through credit, so it is a must that you get a high FICO score. Be responsible with your finances.

Equifax Personal and Business Solutions: Your Credit Score Report is in Good Hands

The purchase of a new home, a new family sedan, or starting a business is some of the reasons why people take out loans. These assets could cost you tens to hundreds of thousands of dollars each, thus it will really be a huge financial burden to acquire these properties using cold cash. Taking out a loan (whether it requires you a collateral or not) will help you in making the purchases of these properties.

However, there are two facades in taking out a loan—its either you win and take it all or you lose and go home with nothing at all but a sad face.

Your success or failure in taking out a loan depends on a variety of factors, yet your credit score is the most significant factor whether you are eligible for the loan of your choice or not.

The rule is simple: if you have a good credit score, you have high chances of getting the loan of your choice. On the other hand, if you have a bad credit score, you have slim chances of doing so. Instead, your lender will provide you a selection of loans with a common base—high interest payments.

Before applying for any loan that you need, you must understand the role of a FICO credit scoring system, which is the standard for the credit score used by most lenders in determining how risky you are to be loaned money to. FICO (Fair ISAAC & Company) is the leading credit report agency that loan providers turn to with regards to credit scoring for any loan application. In other words, if you possess a bad credit history, the lenders will know your credit situation and decide on your loan application based on your credit history.

Here is the summary of the FICO credit score classification:

· If you have a credit score of more than 700, you are eligible for a loan with the best interest rate under excellent terms.
· If you have a credit score of between 640 and 700, you will be able to qualify for 125 percent of your preferred loan.
· If you have a credit score of between 600 and 640, you will be able to get your preferred loan without making down payment.
· If you have a credit score of between 500 and 600, you will be eligible to your preferred loan provided you are willing to make a down payment.
· If you have a credit score of less than 500, there is a slim chance that you get your preferred loan.

Once you determined your credit situation and you think you can secure a loan, you need to have a credit report to be submitted to your preferred lender. There are hundreds of credit companies that furnish reports to commercial lenders, but you might want to try the services offered by Equifax Personal and Business Solutions and see yourself getting approved for the loan that you have applied for.

Equifax Personal and Business Solutions compiles your credit reporting data from credible sources and creates a credit file, which will reflect to your personal credit history, including your FICO score. Through Equifax, you will be able to monitor your entire credit history and check for any inaccurate entries.

Realizing the need for an accurate and free-of-fraud credit reporting, Equifax is now offering online credit report services which have an easy and immediate access to 3 nationwide credit reports, customer care for any inaccurate credit data on your report, and daily monitoring of 3 credit reports with alerts for any changes that must be done.

With Equifax Personal and Business Solutions, your good credit score report is in good hands.

Credit Scores

Credit scores determine if someone gets approved or
declined on any type of credit.

In commercial terms, credit scores are defined as
numerical expression based on a statistical analysis
of a person’s credit files, generated by a
mathematical algorithm.

To be more precise, credit scores are determined on
the basis of the certain amount of credit a person has
taken.

His credit statements are compared with the accounts
of other people applying for credit to the same
financial body.

Bankers and credit card companies are termed as
lenders who use credit scores to evaluate the
potential risk while lending money to the consumers
and to alleviate losses due to bad debt.

Credit scores are being used by the lenders to
determine who qualifies for a loan and who does not,
at what interest rate, and what credit limits they
could lend the money to the person and in what time
and what interest they could get their refund back.

There are lenders who sometimes build or create
regression models that predict the amount of bad debt
a customer may incur.

But it is really difficult and hard to predict about
the debt return still it is done to have an idea in
the future if this person is a high risk or worthy of
future credits.

Lenders usually look for higher number as we have seen
that people with highest score get the lowest rate of
interest.

Different countries use different techniques to make
credit scores and similarity is found between Canada
and USA. But the system is said to be better in
Australia.

Credit Scorecards

Credit scorecards are created with the help of
statistics. First, all past loan applications of
interested consumers are collected.

Then these applications are divided into two essential
categories.

The first one deals with the people who repaid their
loans in due time without much hassle.

The second one deals with those of the defaulted.

It is mandatory to compare the first group with the
second one to prepare an appropriate scorecard.

Credit scorecards provide a accurate measurement of
the likelihood that a customer will repay the credit
amount back in the allowed amount of time.

Logit or probit are estimation techniques which are
statistically used to predict the probability of
default of new clients based on this historical data
base.

The default probabilities are then compared to a
« credit score. » This score will rank the potential
client by their height of risk without explicitly
identifying their probability of default.

It is to be noted that the procedure of credit scoring
was not always fit enough and it did have drawbacks.
Then newer and improved techniques were applied to
maintain this method of comparing credits.

These measures are: hazard rate modeling, reduced form
credit models, or logistic regression.

The essential differences from credit scoring involve
both the data base and the ability to calculate the
financial value of a loan, given its risk from a
credit perspective.

The data base includes all of the available
observations on both defaulted and non-defaulted
clients. This makes it much easier to see the effects
of macro-economic factors like stock prices, auto
prices, interest rates, and home values on the default
rates of retail loans secured by automobiles or homes.

Credit report

It’s really awesome to buy products without clearing
the full bill and keeping the transactions on the way.

But one must remember that while doing transactions in
credit they must keep an eye on the credit facilities
and must have their credit reports of the last
transactions.

Credit reports tell us about the person’s details,
address, contact number, personal details, where
he/she works, social security number, and marital
status, descriptions about previous jobs, recent
positioning, income, debt, and length of employment
and also it contains other factual history of your
credit experience with the credit granter.

But on credit reports no records of arrest, specific
purchase, and medical records are kept. Credit report
are being sold out by the credit reporting agencies
where you are being evaluated for business, insurance,
employment and other purpose allowed by federal laws.

People can get their credit reports only by calling
the agency, there are three credit bureaus suppliers
Experian, Equifax, and Trans Union.

It is very essential to update your credit profiles.
If it is not updated then the agency couldn’t provide
the latest information to the bankers about your
positioning and it is duly needed to maintain
accuracy.

If there are errors in your credit repot one can
straighten them out by going to the agency that
reported the bad report and the agency is bound to fix
the problem, as long as the debt has been cleared.

Always have your paid statements ready as well as your
returned checks or credit card information to verify
any payment made.

Credit Repair Tips

In some cases, bad credit is a result of irresponsible money management. But it often occurs because of unexpected financial hardship. One day you might have all of your bills current, and the next you could become disabled or lose your job. And if you fall behind on your debts, it will wreak havoc on your credit rating.

Credit repair agencies claim that they can remove bad entries from your credit report. But did you know that you can often have them removed yourself at a much lower cost? There are two methods by which you may be able to get negative entries removed from your report.

Option #1: File a Dispute with the Credit Bureaus

The Fair Credit Reporting Act (FCRA) requires credit bureaus to investigate any item on your credit report that you dispute. If the information is found to be false, inaccurate or unverifiable, it must be corrected or removed from your report. The bureaus have 30 days from the time they receive notice of the dispute to complete their investigation.

If there is any inaccurate information on your credit report, a dispute is certainly in order. But some people have had luck disputing items that were in fact accurate, including judgments, collections accounts and repossessions. If such items are not verified by the creditor (or the court in the case of judgments) within the time limit for investigation, they must be removed.

If you decide to dispute a legitimate entry, simply write a letter to each of the credit bureaus stating that you dispute that entry. No explanation is required. But keep in mind that if the entry is verified, it will remain on your report. And if the creditor verifies the information after the 30-day time limit, the credit bureau may reinstate the entry as long as they notify you at least 5 days before doing so.

Option #2: Negotiate with Creditors

Dealing with creditors can be intimidating, especially if you’re not on good terms with them. But speaking to your creditors directly may help you get negative information removed from your credit report.

If you only have a late payment or two on your account, a creditor might be willing to remove the derogatory information once you’ve resumed a regular payment schedule. If you’ve experienced repossession or had an account turned over to collections, payment in full might persuade them to remove the negative entry. It sounds like a long shot, but you never know until you ask. Requests to remove late payment information may be made after you’ve brought you account current. But if you’re hoping for removal of a repossession or collection action, it’s best to negotiate a deal before you pay anything.

If You Can’t Get the Bad Entries Removed

There is no guarantee that disputing information on your credit report or negotiating with creditors will get negative items removed from your record. If it doesn’t, the best thing you can do is try to build up some positive information on your report.

The first thing you need to do when trying to rebuild good credit is bring past due accounts current. Try to work out a deal with your creditors to accomplish this, or talk to a credit counseling agency. But don’t miss payments on current accounts to put money toward those that are past due. If it comes down to paying one or the other, keep the current account current.

Once you’ve brought all of your accounts current, put a priority on keeping them that way. Making your payments on schedule will raise your credit score, and with the passage of time, the good entries may outweigh the bad.

Credit reference

Credit is granted when an organization or an
individual makes money enough to give its customers
some of it to borrow. There are mainly two kinds of
credit-

a) Home loans, or mortgages, and personal or shop
loans are linked to a specific item or items and

b) Revolving credit on payment cards can give an
individual access to a fixed amount of money that he
or she can spend as he or she wishes, in a wide range
of retailers and other outlets.

Credit reference can also be referred to as credit
history. It is handy information, which holds the
creditors personal information, be it of a person or
an institution or an organization.

It provides dealers an account of credit applicants’
past credential dealings in order to make a more
accurate decision.

Credit rating agencies essentially play this role in
while working with consumer credit. Potential lenders,
that is individuals or organizations or institutions
that are interested in investing their money, consult
with established credit rating about appropriate
applicants.

These initial talks are necessary for it decides
whether the said person, organization or institution
is reliable enough to be granted credits.

Credit references helps to assess whether if an
applicant’s credit history indicates proper, timely
payments on all outstanding obligations.

A lender would be able to judge all by himself whether
that the applicant will make timely payments on the
requested loan or not.

Credit references also indicate the applicant’s bank
account, what type of account it is, mentioning at the
same time about overdrafts.