Do you know the main credit factors that affect your FICO credit score?
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Posted On :
Oct-31-2011
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Article Word Count :
966
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If you know these nine key factors are not, you might accidentally damage your credit score and the opportunities for better financing conditions.
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Before discussing the credit scoring factors, please keep one thing in mind: to make any major changes to your credit before the conversation with your loan officer and graphics the right way. Many borrowers shoot yourself in the foot by doing something to their credit, which would have been prevented.
Credit Factor # 1
Maxing out your credit cards credit score is suicide. Your results will suffer if your total assets are suffering more than 30% of the available credit line and really, if you are over 50% of your available credit.
To increase your scores quickly, pay off your credit card immediately.
Credit Factor # 2
Leaving a balance on your card each month a loss of your scores. If you pay off your cards every month to zero, you have a higher score.
Remember to allow time for the cards to the credit reporting agencies, when paying cards. It often takes more than 30 days to update your balances and accurately reflected in your scores. Plan early. Do not try to do these things the day or week, before you apply for a mortgage.
Credit Factor # 3 - this is important
Many people are wrongly advised to close credit card accounts after they are paid. This is 100% false. Damage to your credit scores if you do this. Let's open it, if they arent disturbing anyone. Other good accounts with zero balances will help your scores.
If youTo close accounts, shrinks your pool of available credit lines, and you now have a higher ratio of available unused lines of credit (see # 1 above). This makes you seem closer than previously maxed out, and drop your results.
A perfect example of the practice of consolidating credit cards and closing the ones you just paid off. If you close the other card accounts, your results will fall significantly - as much as 100 points. Therefore, if you consolidate the debt on one card, leave the other cards open with a zero balance to decide.
Credit Factor # 4
Home Equity Lines of Credit (HELOC) must be used wisely. A HELOC is a large revolving credit line secured by your home. If you have a HELOC and use more than 30% to 50% of them are your grades suffer, much like credit card balances.
A HELOC is not a problem, and may in fact be a very good thing if it is not used excessively. A large revolving account with little or no remaining balance will help increase your scores.
Credit Factor # 5
Be wary of lenders who take care of your credit report or to report it DONT exactly. Some credit card companies to do subtle things to actually sabotage your credit history. This is not explicitly reporting the wrong information because this is illegal (make sure credit companies honest mistakes, but that's not the issue here).
First, some credit card lenders do not report your credit history at all. You are not obligated to do so, as credit reporting is a voluntary process. By not sharing your credit history, they restrict competition from theirSee your good story and make you a better deal.
Second, and worse, some lenders report your current balance as your credit limit, so you always look exhausted. This lowers your grades even with a perfect payment history.
Credit Factor # 6
Excessive credit inquiries will lower your scores. There is no exact formula for how much each request will include, but is it safe to say that your results will be adversely affected.
Not run into the potential lender or broker to get your credit until you decide that you want to work. If you know your grades, there is no reason for a lender to run your credit while you are just shopping for the best program offers. This is completely under control: If you give your social security number, it is the permission to run a credit report implicitly - so you do not do it!
Credit Factor # 7
Installment accounts are treated differently than revolving accounts. In fact, it's actually to your advantage to keep rate accounts in good standing as long as possible. This does not mean paying out early on your car loan or other installment loans, unless compelling reasons to do so.
This is somewhat opposite to how to deal with credit cards and other revolving debt.
Credit Factor No. 8
Pre-approved offers are accepted any offers. You can have a ton of already-approved credit offers in the mail. This is just a marketing technique to your to apply for credit. If the offer ask for a Social Security number, it is not an actualApproval.
Credit Factor # 9
Narratives on your credit report, either by you or by a lender are placed negative.
Lender narratives are things such as load off, Collection Account and paid less than the full account balance. These all show that something other than a perfect payment history is happening. If you pay your bills on time, it will never be a reason for a story from a lender.
Credit reporting agencies, you can declare a consumer statement to your report, usually for up to 100 words to why something as it is on the report instead. Do not do this.
First, consumers statements in no way reflected in your credit score. And, dont read lender. You can write excuses all day long, but no lender will take into account when qualifying you for the loan.
Second, you can actually hurt your credit score by a statement that checks for updates and one negative.
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Article Source :
http://www.articleseen.com/Article_Do you know the main credit factors that affect your FICO credit score?_98085.aspx
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Keywords :
credit, cards ,
Category :
Finance
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