DO I HAVE A RIGHT TO KNOW WHAT'S IN MY REPORT?

Of course, you do. By law, the agencies must give you a free report annually. However, those free reports do not contain scores. For credit repair scores we recommend an inexpensive credit monitoring service.

WHAT IS A CREDIT SCORE?

A credit score is a number generated by a mathematical formula that is meant to predict creditworthiness. Credit scores range from 300-850. The higher your score is, the more likely you are to get a loan. The lower your score is, the less likely you are to get a loan. If you have a low credit score and you do manage to get approved for credit then your interest rate will be much higher than someone who had a good credit score and borrowed money. So, having a high credit score can save many thousands of dollars over the life of your mortgage, auto loan, or credit card.

CREDIT SCORE RANGES AND THEIR MEANING

800 and Higher (Excellent)

With a credit score in this range no lender will ever disapprove your loan application. Additionally, the APR (Annual Percentage Rate) on your credit cards will be the lowest possible. You’ll be treated as royalty. Achieving this excellent credit rating not only requires financial knowledge and discipline and, but also a good credit history. Generally speaking, to achieve this excellent rating you must also use a substantial amount of credit on an ongoing monthly basis and always repay it ahead of time.

700 – 799 (Very Good)

27% of the United States population belongs to this credit score range. With this credit score range, you will enjoy good rates and be approved for nearly any type of credit loan or personal loan, whether unsecured or secured.

680 – 699 (Good)

This range is the average credit score. In this range, approvals are practically guaranteed but the interest rates might be marginally higher. If you’re thinking about a long-term loan such as a mortgage, try working to increase your credit score higher than 720 and you will be rewarded for your efforts – your long-term savings will be noticeable.

620 -679 (OK or Fair)

Depending on what kind of loan or credit you are applying for and your credit history, you might find that the rates you are quoted aren’t the best. That doesn’t mean that you won’t be approved but, certain restrictions will apply to the loan’s terms.

580 – 619 (Poor)

With a poor credit rating you can still get an unsecured personal loan and even a mortgage, but, the terms and interest rates won’t be very appealing. You’ll be required to pay more over a longer period because of the high-interest rates.

500 – 579 (Bad)

With a score in this range you can get a loan but nothing even close to what you expect it to be. Some people with bad credit apply for loans to consolidate debt in search of a fresh start. However, if you decide to do that then proceed cautiously. With a 500 credit score, you need to make sure that you don’t default on payments or you’ll be making your situation worse and might head towards bankruptcy, which is not what you want.

499 and Lower (Very Bad)

If this is your score range you need serious and professional assistance with how you handle your credit. You’re making too many credit blunders and they will only get worse if you don’t take positive action. If you are thinking of a loan then keep in mind that if you do find a sub-prime lender (which won’t be easy), the rates will be very high and the terms will be very strict. We recommend that you fix your credit and only then move on to applying for a loan.

HOW DO CREDIT BUREAUS DETERMINE MY CREDIT SCORE?

35% - Payment History

30% - Debt Ratio

15% - Length of Credit History

10% - Types of Credit

10% - Number of Credit Inquiries

The percentages in this chart show how important each of the categories is in determining your Credit score. We will help you to remove negative items from your payment history. We will also show you how to maximize your debt ratio score, even if paying off credit cards is not an option.

WHAT TYPE OF INFORMATION DO CREDIT BUREAUS COLLECT AND SELL?

Credit bureaus collect and sell four basic types of information:

1. Identification and employment information

Your name, birth date, Social Security number, employer, and spouse’s name are routinely recorded in your credit report. They may also provide information about your employment history, home ownership, income, and previous address if a creditor requests this type of information.


2. Public record information

Events that are a matter of public record, such as bankruptcies, foreclosures, or tax liens, may appear in your report.


3. Inquiries

CRAs must maintain a record of all creditors who have asked for your credit history within the past year. It is generally beneficial to keep the number of inquiries as low as possible.


4. Payment history

Your accounts with different creditors are listed, along with the balances, high balances, and outstanding balances. Related events, such as referral of an overdue account to a collection agency, charge-off accounts or other delinquencies may also be noted.

HOW DOES A CREDIT BUREAU DETERMINE MY SCORE?

Credit scoring models are complex and often vary among creditors and for different types of credit. If one-factor changes, your score may change — but improvement generally depends on how that factor relates to other factors considered by the model.

Scoring models generally evaluate the following types of information in your credit report:

* Do you pay your bills on time? Payment history is a major factor in credit scoring. If you have paid bills late, have collections, or declared bankruptcy, these events will not reflect well in your credit score.


* Do you have a long credit history? Generally speaking, the longer your history of holding accounts is, the more trusted you will be as a borrower.


* Have you applied for credit recently? If you have many recent inquiries this can be construed as being negative by the credit reporting agencies. Only apply for credit when you want it.


* What is your outstanding debt? You mustn't be using all of your available credit. If all of your credit cards are maxed out, your scores will reflect that you are not managing your debt wisely.


WHAT IS THE SECRET TO A HIGH CREDIT SCORE?

1. Always pay your bills on time!


2. Don’t close old accounts!


3. Don’t apply for any new credit!


4. Don’t ever use more than 30% of your available credit on each credit card!