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Know your credit score - What
your credit rating can
say about you!
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What is a credit score and a
credit report?
Your credit score is simply a snapshot of your credit use.
It's a brief
overview of seven years of your borrowing history. Your credit
report is
the detailed rundown of your borrowing habits. Credit reports are
provided
by three major credit bureaus: Equifax, Experian, and TransUnion.
How is a credit score calculated?
A credit score is a value assigned to several criteria used in making
lending decisions. Criteria include the amount you owe on non-mortgage
related accounts such as credit cards, your payment history, and credit
history. Scorers take this information from your credit report and
plug it
into formulas that calculate a value representing the amount of risk you
pose
to a lender. That value takes into account the track record of other
consumers with similar credit profiles. By looking at this value, or
score,
lenders are able to roughly gage whether it's a good idea to extend you
credit.
What is a good score?
Your credit report score is based on a formula developed by Fair,
Isaac &
Co. (FICO) or a handful of other credit reporting agencies on a scale
ranging from 300 - 850. The higher the score the better.
Check your credit with a 3-BUREAU CREDIT instant credit report
from
CreditReporting.com! Data compiled using Trans Union
credit report, Experian
credit report, and Equifax credit report!
What can I do to
improve my credit score?
- Check your credit history
for errors. It's a good idea to make sure
that the data each bureau has on you is consistent and up to date by
ordering a copy of your credit report about once a year and disputing
any inaccuracies.
- Pay your bills on time.
Late payments will work against you, so it is
important to make all loan payments on time even if it means only
paying the minimum balance. Apart from extreme circumstances
like
tax liens or bankruptcy (which can remain on your credit report for as
long as 10 years) nothing has as big of an impact on your credit
history
as late payments.
- Don't max out your credit
cards! You should avoid "maxing out"
your credit lines and strive to maintain low balances. If your
cards are
maxed out, lenders may assume that you have trouble managing your
finances.
- Don't apply for too much
credit in a short amount of time.
People tend to get nervous when they receive credit card
solicitations in
the mail. Scorers treat these solicitations as "spot" inquiries,
which do
not affect your score. Whenever you apply for credit, on the
other hand,
it's treated as a "hard inquiry" that's factored into your score.
Too many
inquiries over too short a time can have a negative impact on your
credit score.
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Fix Credit Card Errors
Did you know that over 75% of credit
reports contain errors? This can obviously
affect your ability to purchase a home.
We recommend that
you visit this site
which provides
helpful tips and information on increasing your credit score!
Click here to leave credit score
and return to real estate owner main
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