- Click here to get
your free credit report - This is a good free credit report website.
- Select your state from the pull down menu, and fill in your personal
information.
- Request credit reports from all three main credit reporting agencies
(Equifax, Experian, TransUnion), as there is no charge.
- It is a good idea to have account numbers and loan statements with you at
the same time, as the Credit Reporting Agencies may ask you for account numbers
and payment amounts to verify your identity.
- When you go to each site, be sure to print the report. They will not be sent
to you in the mail if you order them online. Equifax especially tries to make
this confusing, but there is a link on the first page on the left to print
report.
- They will all try to get you to pay another $7 to get your score. Do not buy
this unless you specifically need this. This is NOT your credit score!
Understand Fico Credit Score
- Find out your FICO score. Your FICO score can be found on your credit
report, so you first need to obtain a copy of that. There are three major
reporting agencies in the US: Experian, EquiFax, and TransUnion.
You'll
want to get credit reports from all three, as they may all have slightly
different information on them. All three credit bureaus use credit scores, but
FICO is specific to Experian and TransUnion. To get a free copy of your credit
reports from all three credit bureaus, you can visit Annual Credit Report,
FreeCreditReport.com (a website owned and operated by Experian), or you can call
1-877-322-8228. You can also write any of the agencies directly. Note
that while the credit report is free, the companies charge $6-8 each to give you
your credit (FICO) score.
- Evaluate your score. The point system used technically ranges from 0
- 999, but all or nearly all actual scores fall between 330 and 850.
- 330 - 619: Poor credit. In banker jargon a person with a score in
this range is considered a "Credit Leper."
- 620 - 659: Sub-prime financing will be available to you.
- 660 - 720: Prime financing will be available to you.
- 721 – 750: Prime - x% may be available to you. That is, you may be
able to get interest rates on loans that are even lower than the prime rate.
- 751+: Excellent credit. May enable you to get even lower prime -x%
interest rates depending on the credit type you're utilizing.
- Understand what affects your credit. The exact calculation of the
FICO score is kept secret as proprietary information, but there are some general
guidelines we can apply.
- 35% of your credit score is based on your consistent payment history and
only includes payments later than 30 days past due.
- 30% is based on the percentage of your credit capacity being used; i.e., the
ratio of current credit debt in comparison to total available credit or
revolving credit. If you carry very low balances on credit cards, your score
will be higher than if all your cards are nearly maxed out.
- 15% of your score is determined by the length of your credit history.
- 10% is based on the types of credit you have; i.e., installments (car
payments, student loans, or a mortgage), revolving (credit cards or lines of
credit), and consumer finance (bank loans and the equivalent).
- 10% is based on recent searches for credit and/or the amount of credit
you've recently obtained. Every time you apply for credit it affects your score
negatively.
- Raise your score. Your overall FICO score is the culmination of years
of credit experience, but even in the short run there are things you can do to
raise it slightly.
- Always make your payments on time.
- Don't carry high balances on credit cards. Ideally you would never go
over half the available amount on your credit card for any extended period of
time.
- Fix bad credit. Serious credit problems could range from a 30-day
late payment to a , judgment or Despite what you may have read on some internet
sites, there's no quick fix to repair bad credit. There are, however, ways to
remove inaccurate information and improve your credit over the long run.
- If there is innacurate negative information on your credit report,
get it removed. Dispute the charge with the agencies by writing to them or going
online to their websites. They have 30 days to respond to your dispute. If they
cannot verify the negative information, they have to remove it.
- If you have a 30-day late blemish on your credit you can dispute the
negative information as above. If the credit bureaus can't verify the 30-day
late payment with your creditor, the information must be removed.
- If you have more serious credit problems such as a judgment,
bankruptcy or foreclosure, it may be in your interest to seek a non-profit
credit counselor or an attorney specializing in credit repair. The latter can
sometimes settle your debts for less than 35 cents on the dollar and may be able
to get some of the information removed. If you simply pay off the judgment for
example, it is still going to stain your credit for a minimum of 10 years. For a
foreclosure the term is 7 years, for a bankruptcy, 10 years; and for tax liens,
5-7. Even after that amount of time goes by you will need to aggressively go
after the agencies to get the information off your credit.
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