Credit Score-Free Credit Score

Akhtar R asked:


The credit reports/scores have a point system and abriviations like EFX Beacon 5.0, XPN FICO-II and TUC FICO Classic.Is there a giude or a publication that provides all the details as to how the system works,the credit score system and what are the methodology for correction of mistakes/incorrect/ time expired entries on record of the three Bueau.

Reggie Portwood

s don\’t understand or know what makes up our credit score. Your credit score is the most important piece of information in your financial life. Landlords, lenders, insurance companies, electric companies and potential employers all have your credit score under the microscope. With that being said, you should probably check your credit scores on a regular basis. Check it for errors, potential identity theft and improve your scores over time. The secret to a better credit score is to pay your bills on time and keep your available lines of credit as low as possible. Do not fall for any of these common credit score myths: Myth 1. Checking my own credit will lower my score. You can check your own credit report as many times as you want. These are considered soft pulls and do not have any impact on your score. Myth 2. Shopping lenders will lower my score. No doubt each lender you make application with will have to check your credit to accurately make a decision. The credit bureaus realize and understand that most people are going to get multiple quotes when buying big ticket items like homes and automobiles. As a result all of these type inquiries made within a 14 day period are counted as one inquiry. Myth 3. There\’s only one credit score. There are three credit bureaus. Experian, Equifax, and Transunion. Each bureau generates a score therefore you will have three credit scores. Each score will vary so its good to know all three scores. Myth 4. Age, income, *** and race will affect your score. None of this information has any impact on your credit scores. Your age and employer may be listed on your credit report, however it has no impact on the score itself. Myth 5. A simple dispute letter will remove bad credit. Sorry, but this one cracks me up. If it\’s a legitimate account, being reported accurately it will not be removed regardless of how many letters you submit disputing it. If you do see errors on your credit report you should by all means dispute it. The credit bureaus have 30 days to reply and are quick to remove inaccurate data. Myth 6. Marriage will merge both reports. Credit information never gets mixed. Accounts are either opened individually or jointly. Don\’t think marrying someone with good credit is going to raise your credit score. We recommend checking your credit quarterly. Refer to myth number one, a soft pull will not lower your score. It is to your benefit to keep an eye on your credit, protect it and constantly improve it.

By: John Rasor

About the Author:

Jeff

Mr. Main Event asked:


Currently, I’m donating (via automatic withdrawal from my credit card) to a few charities. I was away for a couple of months and didn’t update my credit card info. As a result, I missed a few payments. Will this affect my credit in any way?

*From my understanding, the only way your credit/FICO score will be affected is only if you borrow money from a creditor. But, since charity organizations aren’t creditors, I’m presuming that it will not affect my credit in any way. Am I correct?

Justine

In the old day’s before classic FICO credit scores were available, credit lenders frequently use to by hand look over every applicants credit report and credit history in order to choose whether or not to extend credit. This business ractice was exceedingly time consuming and every so often resulted in unwanted human oversights.

For this reason, Fair Isaac modernize a Fair Issac credit scoring formula to help credit lenders make more precise decisions in much less time. The fair Issac credit scoring system takes into account numerous variables like amount of debt owed, types of debt, number of payment sixty days past due and how often an applicant is looking for credit.

A common thing numbers of people fail to consider is that depending on the kind of credit that is applied for you may find the Classic credit score is not the same. The justification for this can be that credit lenders use numerous versions of the Fair Isaac FICO credit scores. The goal of this editorial is to offer an understanding of the various types of FICO scores that are often seen whenever in search of new credit.

Classic FICO®

The Classic FICO credit score in the past has been the most widespread kind of credit scores employed by the majority of credit lenders. Every day thousands of lending decisions per year are determined using the Classic FICO score. If you are in search of a home refinance loan, auto loan, motorcycle loans or other retail consumer loans it is not uncommon that the bank will utilise a Classic FICO credit score. My Classic FICO credit score is many times referenced to as Beacon®, FICO Risk Score®, or Empirica® depending on the credit reporting agency.

NexGen FICO® Risk Score

The NexGen FICO risk score is usually referred to as a by-product of the Classic Credit score aimed at lowering the risk of credit lenders while at the same time permitting them to raise their approved applications. The NextGen Risk score takes into account significantly more predictive factors than the Classic FICO risk score consequently permitting it to be more accurate. The NextGen Risk score is presently being frequently applied by credit lenders and is getting very well-liked in retail consumer loans. NextGen FICO risk score, can also be referenced to as the PinnacleSM, FICO® Risk Score or Advanced Risk Score.

Industry Specific Risk Score As the name implies particular industries utilize specific FICO Risk Scores. In general these scores are an extension from the Classic FICO risk score or NextGen FICO risk score, but normally they will employ a reasonably different predictive weighting relating to factors that are special to the industry. You may see industry specific credit scores for auto, bankcard, finance and installment products.

CallScoreTM A CallScore is used normally in the Britain. It is configured in order to maintain track and determine the likelihood of Britain credit applicants to pay off their credit and not default on credit obligations. As described by Fair Isaac® “CallScore leverages CallCredit’s database of Britain customers credit profiles and demographic info, in combination by using Fair Isaac’s predictive analytical expertise, – gauge each buyer’s relative chance of default.”

In conclusion, loan applicants need to understand that the FICO scores which are purchased from the credit reporting bureau may differ from the credit scores credit lenders are applying to make a decision on the conditions of their financing request. The above FICO credit score forms supply customers an overview of which style of scores they might run into whenever looking for a new loan.

Copyright (c) 2006, by Jay Fran. This article may be freely distributed as long as the copyright, author’s information and the all of the above active live links with anchored text are published with the article.



By: Jay Fran

About the Author:

Everett Dume

What Exactly Is a FICO Credit Score Composed of?

Your FICO score is a very important item to keep monitored on a regular basis due to the fact that it, in a large part, has a lot to do with getting loans, insurance, even a job and more. As we all know, FICO scores cover a lot of our financial background, but what areas are these? There are five main areas and the percentages may differ slightly between reporting companies. Payment history, amounts owed, length of credit history, new credit, and types of credit are all considered in your credit score.

Payment history holds the most water in terms of FICO scores as the area usually consists of around 35% of a credit score. This factor shows how well an individual has made payments in the past and if there have been any delinquencies along the way. Other items such as bankruptcies will show up under this section. Remember that if any delinquent payments appear on a credit report, time has an affect on the weight of that issue.

The next category is amounts owed. Amounts owed consists of around 30% of the credit score and this category basically consists of what your outstanding balances are and how much credit you have left in your revolving debt accounts. This is looked at in the form of a ratio where it compares balances against the actual amount of money available to you. Remember that opening more accounts will not exactly help you in the long run if you find yourself in this situation as it will affect another category which is the new credit area.

Next, the area involving the length of your credit history takes its position at around 15% of your FICO credit score. This area simply measures all the data referring to how long you have actually been making payments on different types of loans or revolving debts. This has a lot to do with your credit score as it shows the potential lender how much evidence of experience with making payments you can provide them with so that they can, as always, minimize their risk that the borrower may potentially default or not make payments on time.

Now, back to the item regarding opening new accounts to add more credit to your balance and available credit ratio, when a person opens new accounts or even makes new account inquiries, this all goes onto that person’s credit report therefore affecting their score. New credit inquiries consist of about 10% of your credit score. Now some individuals may have applied and obtained new accounts as they improve their credit after a bankruptcy of history of delinquent payments. This situation, if positive, will really help a person’s credit score after the fact. But in most cases it’s best to have the same accounts for longer periods of time.

Last, the types of credit accounts that you are currently making payments on affect your credit report as it consists of around 10% of your credit score overall. The main issue here is that the lenders want to know, first, that you are paying loans off on time, but also, what types of accounts these actually are. An account from a popular electronics store where a person makes payments on a new microwave oven is not the same as a mortgage. FICO scores are adjusted in order to show this difference in your credit report.

If there is one thing to remember, it is that your credit score is one of the most valuable things you can have when applying for a loan and more. Your credit score, however, has much more relevance to your actually getting the job you want or even being able to receive medical insurance in many cases as well. Everyone wants clients, employees and customers who are responsible and who get the job done be it making payments or completing tasks for an employer. If the credit score is not monitored regularly, the negative issues, whether or not they are your fault (i.e. identity theft) that commonly affect individuals’ credit scores may very well take affect. So watch that credit closely and make sure that you are being represented in the fairest of ways overall.



By: S. Michael Windsor

About the Author:

Kasey Behne

Your FICO or credit score is an overall evaluation of your financial health that helps lenders determine your creditworthiness. Credit scores affect whether you can get credit and what you pay for credit cards, auto loans, mortgages and other types of credit. Higher credit scores mean you are more likely to be approved for most kinds of credit and pay a lower interest rate for that credit.

Your credit score can come between you and many things in life. Since a FICO score is the excepted standard for many companies, a low score will mean you have to pay higher interest rates, if you can get a loan at all. It can also mean that you will have to pay higher deposits for utilities such as telephone, electricity, cellular phone plans and many other services. While this may not seem fair to most consumers, it is done by companies to determine whether or not they can rely on you to pay your bills on time.

Typically, those with a lower credit score have issues with paying their debts, or paying them on time. This indicates to companies and banks that the person is probably a high risk case and if they do decide to approve the loan or service, they must protect themselves from that risk by charging more. It is an excepted practice that can restrict or impede the lives of many people.

Your credit score is a valuable asset for many reasons. A very good score allows you to obtain credit more easily and at lower interest rates. But a high credit score can also help you qualify for a cell phone, avoid or reduce a deposit paid for utilities for your home or apartment, and get lower insurance premiums. Your credit score may also be used by potential employers and landlords as a screening tool. Your credit score is very valuable, and you should treat it like the asset it is and always work on improving it.

Three quarters of all lenders use FICO scores when considering requests for loans or credit. To enhance your chances of being approved for any type of credit and get the best interest rates, your score should be 720 or higher.

Lenders look at your credit scores all the time. They look at your scores when deciding, for example, to extend credit to you, or whether to change your interest rate or credit limit on an existing credit card, or to send you an offer through the mail. Having good credit scores makes your financial transactions much easier and can save you money in lower interest rates, lower insurance premiums, and reduced deposits or down payments. That’s why your credit score is a vital part of your financial health.

You should be ever vigilant in achieving and maintaining a high credit score to enhance your chances of obtaining the credit you may desire. Watch for future articles regarding one of the most important financial assets you possess, your credit score!  For more information about why your credit score is important check out this site http://GetMoreCreditScore.com/info2.



By: Carey Snow

About the Author:

Sherill Eroh

eHow asked:

Although there’s no such thing as a perfect credit score, a good credit score ranges between 700 to 800 points, which can be achieved by paying bills on time and not maxing out credit cards. Learn more about achieving a perfect credit score with tips from the vice president of a bank in this free video about credit card score advice.

Parker Chandler

TheAmazingDoctorZunt asked:

Doctor Zunt has uncovered a terrible & all to common practice in todays buisness world. It seems that a LOT of Employers of large and quite “respectible” companies will NOT hire a prospective candidate/Employee if His or Her Credit score is not that great! It seems that to a lot of Employers,aplying for a Job with a “respectible” Company with bad or terrible Credit is just as bad as aplying for a Job at that Company with a criminal record!!! Perhaps Law Makers on Capital Hill need to include …

Chris

ccsamoneymentors asked:

Do you know your credit score? According to a recent poll, 80 percent of people dont. Peter Exner of Credit Counseling Services of Alberta says there are two main credit reporting agencies in Canada where you can find out your credit score. Exner explains how credit scores work, and how to get yours.

Dennis

bankaholic asked:

Our very own Bankaholic Banker Alicia Lagan shares some great tips on how to raise your credit score (FICO).

Alena Bordeau