FICO score ratings are used for most mortgage lending, which means, you need to know what will hurt or help your credit score points. To make it clear, here are some of the most common credit score myths.

Checking your credit report will hurt your credit score

Checking your own credit report and credit score counts as a soft inquiry and does not go against your score. However, if anyone else like a lender or credit card company is checking your credit report, this is considered a hard inquiry and will generally knock off about 5 credit score points.

The credit score rating system treats multiple inquiries in a 14-day period as just one inquiry. The system ignores all inquiries made within 30 days prior to the day the credit score is computed. So if you want to minimize the damage from credit inquiries, shop for a loan in that short period of time.

Closing old accounts will improve your credit report score

Sometimes even lenders will tell you to close your old and inactive accounts as a way for improving your credit report score. In most cases, closing old accounts will actually have the opposite effect with the current credit score rating system.

Canceling old credit accounts can actually lower your credit score because it makes your credit history appear shorter. If you want to reduce your levels of available credit, it’s better to reduce or close new accounts instead. Applying for new credit is more likely to lower your score.

!inlineRSS:news_creditscore You need to check more than just FICO score rating

If you ever hear this from anyone, consider it a red flag. All of the three major credit reporting bureaus offer FICO credit score ratings using the formula developed by Fair, Isaac. Even though each one gives the scores a different name you only need a fico score rating from the three major credit reporting bureaus.

At Equifax, the FICO score rating is called the Beacon credit score. At TransUnion, it’s called Empirica. At Experian, it’s known as the Experian/Fair, Isaac Risk Model.

The reason each of the three major credit reporting bureaus will have three different scores is because they don’t all share the same data. So when checking your credit report, just make sure it comes from the three major credit reporting bureaus: Experian, Trans Union and Equifax.

Examine your credit reports from all three major credit reporting bureaus before you apply for a big loan like a mortgage. Fix any errors in all three reports before you shop for a loan because it takes time to correct your credit report.

Credit counseling will hurt your score

The current FICO credit score rating system ignores any reference to credit counseling that may be in your file. The researchers at Fair, Isaac, the company that created the FICO credit scoring rating system, found that people getting credit counseling didn’t default on their debts any more often than anyone else.

However, any late payments you’ve had with creditors will hurt your credit score. Credit counseling can hurt your ability to get a loan because you probably have had trouble paying creditors.

Some lenders will back away if you are in credit counseling. Others may see it differently, but usually will charge you higher interest rates than if you had perfect credit.

The best way to improve your credit report score is paying your bills on time and paying down credit card debt. Check your credit report regularly for any errors and make sure you don’t fall for these common credit score myths.

Copyright © 2005 Credit Repair Facts.com All Rights Reserved.

About the Author

Gary Gresham. This article is supplied by http://www.credit-repair-facts.com where you will find credit information, debt elimination programs and informative articles that give you the knowledge to correct your own credit and credit report. For more credit related articles like these go to: http://www.credit-repair-facts.com/articles_1.html

First, let’s define the acronym FICO. It is used to describe a system developed by the Fair Isaac Company for one of the Big Three credit reporting companies, Experian. Since its inception, FICO has gone on to become the standard within the credit industry for determining the creditworthiness of potential borrowers. It consists of a series of questions, and answers are given a certain number of points. When they’re all added up, that number represents your FICO score. (All the information in your credit report is considered, of course, but FICO also examines more than twenty factors, divided into five main categories.)

The first category considers your payment history, and represents 35 percent of your score. The factor carrying the most weight is the timeliness of your payments, with emphasis placed on your most recent bills. Paying all your bills on time will raise your FICO score. The more late payments you’ve made, the lower your score will be. If your accounts have been turned over to collection agencies, that hurts even more, and if you’ve declared bankruptcy, that will earn you the lowest FICO score.

!inlineRSS:news_creditscore FICO places a 30 percent emphasis on the amount of money you owe and your available credit. It also asks about your outstanding debt, such as your mortgage, credit cards, and auto loans. FICO also asks the total amount of credit you have at your disposal. For instance, if you have five credit cards, each with a $2,000 limit, that amounts to $10,000 of available credit. Consumers who have access to a significant amount of credit have a tendency to use it, which can make them a greater credit risk overall. If your cards are close to the maximum already, that makes you an even less attractive risk. The people who obtain the highest FICO score in this category are those who use their credit prudently and maintain relatively low balances.

Some 15 percent of your FICO score comes from the length of your credit history. Simply put: the longer you’ve been using your credit, especially if it’s been with the same companies, the higher your FICO score will be.

FICO puts a 10 percent value on the overall mix of your credit. The more types of loans you’ve had, the better, as far as your FICO score. If you’ve had car loans, credit card payments, various types of installment loans, and a mortgage, you’ll receive a higher FICO score.

Your FICO score also gives you a 10 percent premium if you’ve sought new credit within the past year. FICO gives points for clients that are savvy enough to shop around for better interest rates for home or car loans from time to time. However, you get deductions if you apply for credit to many times.

Your FICO score can determine the percentage rate of your car or home loan, and may even get you a lower rate on your credit cards. It’s a number that’s worth knowing. However, don’t pay for your FICO score. The numbers you get from a paid service are NOT the same FICO scores your real estate lender gets. If you want to know your FICO, ask a loan officer.

Copyright © Jeanette J. Fisher

About the Author

Jeanette Fisher teaches how to get out from under credit card debt, how to use credit to make money, and six ways to build strong credit to finance your first home and multiple investment properties. For free credit advice and free ebook “Credit Tips for Mortgage Financing,” see http://worryfreecredit.com

Contrary to what you may have seen in magazines, in your email box, and on late-night television, there really are no quick fixes that will instantly repair your credit. It will take time and an ongoing effort from you to do that.

When computing a credit score, mortgage lenders examine five sections of your credit report. They look at your past payment history, the amount you currently owe, how long you’ve had credit, the types of credit you’ve received, and any new credit for which you’ve applied. Here are some suggestions for improving your credit score if there are one or two weak areas in your report.

!inlineRSS:news_creditscore First, try to keep your debt load to a minimum. A high debt-to-income ratio will drive your credit score down. If you have debt, pay it off rather than shifting it from credit card to credit card. However, if you have one card with a lot of available credit and another card nearing the limit, shifting part of the balance makes sense. You don’t want any credit cards with a balance near the credit limit. Any maxed-out credit line lowers your score dramatically.

Next, stop making late payments. Some people are lackadaisical about paying bills, but if you have bills that are past due, get them paid up and keep them current from now on. If you have bills that you know you’re going to have trouble paying, contact that creditor right away and work out a payment plan that will help keep the negative information off your credit report. If you have past due remarks on your credit report, contact the lender and ask for them to remove the negative report since you are now current.

There’s not much you can do about the length of your credit history. All you can do is to make sure that your history from this moment on will be perfect. Time is time, and there’s no way of changing it or speeding it up.

If you decide to open a new charge account, do it sparingly. Don’t open a number of new accounts in the hope of raising your score. In most cases, new credit won’t raise your score, and may actually do more harm than good. If you’ve had payment problems in the past but are now more stable, it will help to open a few new accounts, but if you get one, pay it off on time and don’t max it out.

If you can, try for a mixture of different types of loans, such as installment loans (car loans, for instance) and credit card debt. Loans with fixed payments can help raise your score if you live up to your part of the bargain as agreed, but you don’t want too many of those kinds of loans, because the fixed payments will lower your debt-to-income ratio.

There are ways to improve your chances of obtaining a home loan, even if your previous history has been less than stellar. However, there’s no quick way out. It will take time and concerted effort to raise your credit score enough to be considered a good risk by your lender.

Copyright © 2006 Jeanette J. Fisher

About the Author

Jeanette Fisher teaches home buyers six steps to build credit for home loans. She is the author of real estate investing books including Credit Help! Get the Credit You Need to Buy Real Estate available on Amazon.

Software developed by Fair Isaac and Company generates your “FICO score.” Experian uses a system called Fair Isaac Risk Model, a computer program which rates you with a score according to Experian’s information. Equifax bases scores on BEACON programs and TransUnion bases scores on EMPIRICA models.

!inlineRSS:news_creditscore Your Baseline

You have three credit scores, often called FICO scores, one from each credit bureau. The lender takes the middle score as your baseline. Lenders have different standards, but generally a “C” score is around 500 to 600, a “B” is around 600 to 680, and an “A-” is above 680. Over 700 is the magical number that gets you the attention you desire. If your score is under 500, find someone to privately finance for you or a partner with good credit while you work on improving your score.

How Lenders Rate You

Credit score Available mortgage financing
720 – 800 Superb! You get what you want
700 – 719 Wonderful! You get top rates & terms
680 – 699 Good! You get good rates & terms
660 – 679 All right. You pay higher costs & rates
640 – 659 Okay score if good income
620 – 639 Weak. You need good income & some money
600 – 619 Poor. Use creative loan broker & pay more loan costs
580 – 599 Almost impossible without large down payment
Under 580 Work on fixing credit without delay

What Does Not Count In Your Credit Score

The scoring model doesn’t compute:

• Age & gender
• Race
• Whether you own a home or rent
• Length of time at your current address
• Job or length of employment at your job
• Income
• Education
• Marital status
• Whether or not you’ve been turned down for credit.

Real estate lenders don’t just consider your credit score when you apply for mortgage financing. Understanding your credit score helps you with this one part of your mortgage requirements.

Copyright © 2005 Jeanette J. Fisher – All Rights Reserved.

About the Author

Professor Jeanette Fisher, author of “Credit Help! Get the Credit You Need to Buy Real Estate,” “Doghouse to Dollhouse for Dollars,” and other books teaches Real Estate Investing and Design Psychology. For more articles, tips, reports, and newsletters, see http://www.recredithelp.com/

As I mentioned above the FICO score is a numerical score that is based on your financial history as collected in your credit report. Creditors can use this number to evaluate whether or not you are able to pay a loan back on time. The higher the score the more likely you are to pay off a loan on time and the less of a credit risk you pose.

The FICO or credit score ranges are broken down as follows:

720-850 – This represent the best score range

700-719 – Able to obtain favorable financing terms

675-699- This is still a decent score range

620-674 – May have trouble obtaining favorable credit terms

560-619 – May have trouble obtaining credit

500-559 – Time to improve your score

!inlineRSS:news_creditscore Your credit score is broken down into 5 distinct categories each with their own importance based on a percentile. The 5 categories and the percentage they represent I relation to your credit score are as follows:

• Payment History – 35%
• Amounts Owed – 30%
• Length of Credit History – 15%
• New Credit – 10%
• Types of Credit Used – 10%

Your payment history contains information on credit cards, retail accounts, installment loans, finance company accounts and any mortgages you may have had. It also details any past due accounts and the amount owed on hem. You will also find bankruptcy information as well as other adverse information in regards to your credit history. This is why it warrants a 35% piece of the pie.

Your amount owed is generally speaking the amount owed on any accounts you currently have and number of accounts with balances. Note that it has a large impact (30%) on your credit score. The length of your credit history details when accounts were opened and the last activity on those accounts. New credit shows the number of recently opened accounts by the type of account and number of account inquiries. Finally the type of credit used is a snapshot of what types of financing you have held.

Other information that is included in your credit report but has no bearing on your FICO score includes your race, age, where you live and your sex and employment information. Although the FICO score doesn’t use these factors the employment information may be used by other companies and creditors to help in their decision making process.

There are three major credit-reporting agencies – Equifax, Experian and TransUnion that have your credit information on hand. Each of these credit bureaus maintains their information separately, which can cause the financial data to be slightly different among the three of them. Most experts agree that in order to get the best snapshot of your financial history and credit worthiness it is a good idea to request a report from each of the reporting agencies. It is also highly recommended that you actually review your credit report once a year in order to identify and correct any errors before they cause any future potential problems when you apply for credit. Recent changes in the laws no allow for consumers to request 1 free credit report each year in order to look for any such errors.

Here is the contact information for each of the three reporting credit bureaus:

Equifax: (800) 685-1111, www.equifax.com
Experian: (888) 397-3742, www.experian.com
TransUnion: (800) 888-4213, www.transunion.com

As you can see your FICO Score is a very important number that represents your financial trustworthiness in the eyes of creditors. Failure to properly monitor it could cause you future headaches when it comes time to apply for any form of credit.

About the Author

Timothy Gorman is a successful Webmaster and publisher of Debt-Relief-Solutions.com. He provides more debt relief, consolidation and credit repair information that you can research in your pajamas on his website.

What does my credit score mean? This is one question that people often ask when they get their free credit report. In order to do well with credit score repair, it is necessary to know what information the score is based on. One important factor is your payment history. This is the details of your accounts, your monthly payments and whether or not you make them on time. If this is what is causing you to have a low credit score, then a simple way of repairing your credit score is to start paying all your bills before the due date.

!inlineRSS:news_creditscore What is considered a good credit score? Credit scores range from 375 to 900. Most people with good credit have a score around 600 to 650. If you have a score higher than 650, then you are in good financial shape when it comes to getting credit and you don’t have to worry about credit score repair. It is when you see your score below 550, then you have to start taking steps to repair the score.

How can I find out what my credit score means? If you look for information about credit scores online, then you will find the percentages that each of the following are involved in computing the score: payment history, amount of money you owe, length of time you have been borrowing, the types of credit you use and the amount of credit you have received recently. There is also a section of your credit report that tells how many times you have applied for credit in the past few months. If there is a list of names, you have to stop applying in order to do credit score repair.

Credit score repair is not something that will happen after a month of paying your bills on time. It is something you have to work at and it could take six months or more for you to notice a gain in your credit score repair. Just keep the range of a good credit score in mind and work at paying your bills. No one can do this for you – only you.

Credit score repair is perfectly possible, despite what you may have been told. But don’t expect it to be fast.

About the Author

To download a free copy of Peter’s Credit Repair book visit Peter’s Website Credit Repair Answers and find out about Credit Bureaus and more, including Credit Repair Services, Free Credit Reports, and Online Credit Repair.

Credit score gives lenders a snapshot of your ability to pay back a mortgage, a car loan, a personal loan, and credit-cards. Credit scores are fast and objective. Before scoring existed, the process of credit worthiness evaluation was slow, inconsistent and often biased. The appearance of Credit Score is undoubtedly an improvement in the loan industry. Today, credit scores provide several benefits to both lenders and people seeking credit:

People Can Get Loans Faster

Credit decisions can be made in mere minutes. Even mortgage applications that used to take weeks can now be approved in hours. Internet lenders and retailers can make instant credit decisions. The increasing speed of the approval process has lead to loans being approved and deposited into the applicant’s bank account the very same day.

!inlineRSS:news_creditscore Credit Decisions Are More Objective

Credit scoring has no personal information about the person seeking credit – it is based solely on information about their bill-paying history. Thus, the lender’s predisposition has less influence in the decision and often, it has none at all because the lender never meets the applicant till the loan is already approved and the applicant signs the contract.

Past Bad Credit History Counts For Less

Since credit reports are actualized regularly, a delinquency doesn’t affect your credit as it used to do. If you have had poor credit repayment history in the past, it is less significant if lenders use credit scoring. Credit score weighs the positive information and the negative information in your credit report. Before, negative information had a stronger influence on the approval process.

More Credit is Available

Lenders who use credit scoring can approve more loans, because credit scoring gives them more accurate, current information. It lets lenders determine which individuals are likely to pay their loan payments even though their credit report shows past problems. Lenders can offer a choice of credit products geared to different risk levels and they have a better understanding of the risk they are undertaking.

Credit Rates Are Lower

When more credit is available, the cost of credit for borrowers decreases. Automated credit processes, like scoring, make the credit decision process efficient and less costly for lenders. By controlling losses, lenders can make rates lower. Mortgage rates are lower in the United States than in other parts of the world because of the availability of information on the applicant’s credit situation.

About the Author

Mary Wise, a professional consultant with twenty years in the financial field, helps people in the process of securing personal loans, mortgage, refinance or consolidation loans and preventing consumers from falling into the hands of fraudulent lenders. At http://www.badcreditfinancialexperts.com/article/ you will find more useful tips and interesting articles on this subject and other financial related topics.

“What can you do to increase that set of three numbers on your credit report that can be so important with your financing?”

I came across this question as I was surfing discussion groups the other day. Check out my answer:

Dear Friend,

Here are 3 steps I used to take my credit score from 592 (horrible credit) to 762 (perfect credit) almost overnight. If you’re interested in improving your credit rating quickly, you’ll find this story helpful:

In 1995 I made a decision that would ruin my perfect credit history. I quit my salary job to become an insurance salesman. The job paid commission only. Within a few months I lost everything – house, car, credit rating and my self respect.

By the end of 1996 I was living with my mom, all my credit accounts were severely past due, and I was paying 22% interest on a broke-down green Geo Storm…I was a real loser.

!inlineRSS:news_creditscore Then, in 1997, I became a banker. I didn’t know it at the time, but this would turn out to be the break I needed to eliminate my credit problems forever.

During my seven years as a banker, I came across several legal and highly effective ways to improve my credit rating. As a result, I was able to increase my credit scores by an average of 170 points.

Here’s what I did:

Step #1: After spending hundreds of dollars on credit repair services that didn’t work, I found out how to get negative accounts removed on my own.

Basically, I wrote letters to the collection agencies requesting proof that the accounts were mine. 89% of the time they had no proof that the bad accounts belonged to me. So I was able to get them deleted from my credit file.

Step #2: I opened new accounts with high credit limits and kept the balances low.

I discovered that if you keep your available credit limits high and only use 10% to 30% of the credit you have available, your credit score will improve dramatically.

Step #3: Next, I added accounts with years of perfect payment history to my credit file. This step took my credit score from 647 to 762.

While you can certainly add seasoned accounts to your credit file for free, there are companies that claim they can do it for a fee.

The problem is, they charge between $2,000 and $2,500 per account. If you want a 700+ credit score you’ll need 3 to 4 of these accounts. That equates to a cost of $6,000 to $10,000.

(You can conduct a search on your favorite search engine for companies that offer this service.)

While there are several highly effective steps you can take to increase your credit scores by as much as 200 points, these are the main ones…And here’s the good news: Each step can be completed in less than 30 days.

About the Author

By Hartley W. Pinn, Jr, CEO, http://www.AtBalanceCreditRepair.com Revealing the insider credit secrets you can use to increase your credit scores by up to 200 Points.

Poor credit personal loans are such type of loans which are especially targeted for all those having poor credit score. In the sense, that the financial market doesn’t take into account the credit rating. So, what ever was the reason for your credit score, you can still avail the loan.

There are various aspects which are needed to be considered. They are:

• Interest rate Interest rates are considered as the common and core criterion, upon which one determines the competitiveness of the loan deal. Such deal must be accepted which offers low rate of interest. The lender determines the rate of interest by taking into account various factors such as financial status, credit worthiness, rates prevailing and the bank rates.

!inlineRSS:news_creditscore • Terms and conditions It is generally seen that the borrower forgets to consider terms and conditions of the loan deal. Rather, considering terms and conditions should also be formed as criterion in comparing various deals as single unfavorable term can emerge as hurdle in making repayments.

• Repayments The borrower must always try to make timely repayments as this will help in improving his credit score. And, if the borrower fails to make timely repayments then it can affect its credit report adversely. As a result, it will become impossible for him to avail finances from the financial market.

• Types Like other loans in the financial market, poor credit personal loans can be availed in either of the two forms that are secured poor credit personal loans or unsecured poor credit personal loans. Mostly, it is seen that secured form of poor credit personal loans offers comparatively better and competitive rates.

• Uses Poor credit personal loans are multipurpose loans, which can be used to satisfy any personal desires such as financing a car, purchasing a house, wedding, holidaying, consolidating debts, home improvements or any other way as the borrower desires.

• Research Research is considered as the key to find the most competitive deal of poor credit personal loans. By means of research the borrower will be able to know the trend and the rates prevailing in the market which further, results in determining the most competitive deal.

Thus, poor credit personal loans will solve all the financial problem of the borrower and simultaneously will also improve the credit score.

About the Author

Turk Malloy works as financial advisor in poor credit rating loans. He is offering loan advice for quite some time. To know more about poor credit rating loans, poor credit personal loans, poor credit tenant loans, poor credit rating tenant loans visit www.poorcreditratingloans.net

Your credit score is based on multiple variables that are dependent on your credit and amount of money loaned out to you. Your credit, or more appropriately addressed as the ability for you to pay back the money that has been loaned to you, whether it be through a credit card, mortgage, home equity loan, car, RV, boat, motorcycle, rental apartment or town home, or just about anything that involves you paying back money trustingly for the items you have purchased or pay for on a monthly basis.

When your credit score is accumulated, each item is passed through a system where points are either awarded or deducted based on the status of the terms. For example, if you have a specific amount in a loan, and you are paying consistently and on time, then you will be awarded points. However, if you are late on payments, and have many credit cards close to maximum, perhaps have not made every house, car, or RV payment, on time, then you will be deducted points.

The computer program evaluates the awarded points and deducted points to come to a total. This total can range from around 330 to the lower 800’s. This score is used to evaluate if you can make your payments and on time.

!inlineRSS:news_creditscore There is usually a clear relationship between those with a higher score and those with a lower score. Those people with a higher score, above about 680 are capable of paying back the loans that they take out. However, those who have a score below 680 are less capable of paying back their debts on time.

Lenders use this information to determine the terms of your mortgage when buying a home. I f your credit score is up to par, you can expect a lower interest rate, shorter terms, and less fees. However, if your credit score is below the average, then you can expect to have a higher interest rate, more fees, and possibly more expenses that are associated with the lender taking a greater risk with a person that may not be capable to pay back the mortgage in a timely basis.

So as a result, your credit score is a huge influence in the mortgage terms that you can qualify for. Because of this, you should try to clean up your credit score to the best of your ability. This means paying back loans, paying on time, and closing out any credit cards that are not necessary in your financial situation.

There are many things that actually affect your credit score. Keep in mind that if you pay on time and are on top of the debt that you have, having some debt and credit is a beneficial thing. If you can prove that you can handle debt, and pay on time and towards the principal amount, then you will not have as many problems.

If you have too many delinquencies, a short credit history, too many revolving accounts, too few revolving accounts, balances that are close to maximum, too many accounts, and of course major problems such as tax liens, judgments and bankruptcies, then you can expect your credit score to be lower than average.

In order to repair these credit issue to get the mortgage rate that you deserve, be sure to handle any debts or payments that might deduct points from your score. Pay above the minimum, on time, and you will quickly see your credit score increase as the problems are depleted.

The basics for having a decent credit score is to not have too much debt, pay your debt on time, and not have too high of interest rates! If you feel you need to correct some issues on your credit score, then do it! You can end up saving thousands of dollars! Do not buy a home until you are financially stable and capable of maintaining a house. You do not want to take on something that you can not handle financially.

About the Author

John R Blakefield is a mortgage and real estate specialist. For more information, articles, news, tools and valuable resources on home mortgages or investment loans, refinancing, debt solutions, visit this site: http://www.scourtheweb.com/mortgage/.