The article "Credit Scores" talks about credit, it has been written by Doug Parker.
A credit score is an indicator of how likely you are to default on a loan or credit card in the next 24 motnhs. This information is used by cerdit grantors when evaluating your credit for approval. Your BEACON®, FICO® or EMPIRICA® scroe is based solely on information in your credit file maintained by the credit reporting agencies. Other scores may be based on a combination of credit information and other information that you supply on your credit application.The way you have handled credit in the past may indicate how you will mangae credit in the future.
Credit scores cannot predict with certainty how you will manage credit, but they do provide an objective estimate of how likely you are to repay on time and according to terms.How Are Scores Calculated? Your credit report is the basis of your FICO® score. The report details your credit history as it has been reported to the credit reporting aegncy by lenders who have extended credit to you, by court records and by you.
The FICO score analyzes information from the trade line, inquiry, public record and collection sections of your credit report.A FICO socre evaluates five main categories of information in your credit report, and compares this information to the patterns in hundreds of thousands of past credit reports. These five categroies are, in order of importance:1.
Payment history — what is your track record? 35 % of the scoreRisk predictors here look at:· Severity – how bad are the delinquencies? · Recency – how recent are they?· Frequency – how many times tried it occur?2. Amounts owed — how much is too much? 30% of the scoreRisk predictors here look at:· Large outstanding balances· The ratio of balances to credit limits3.
Length of credit history — how established is yours? 15% of the scoreRisk predictors here look at:· Age of the trade lines - (the age of the oldest account, the average age of accounts, or both).4. New credit — are you taking on more debt? 10% of the scoreRisk predictors here look at:· Number of inquiires and new account openings5. Types of credit in use — is it a healthy mix?
10% of the scoreRisk predictors here look at:· Number of trade lnies reported for each type: bankcards, retail, department store cards, installment loans, etc.Doug Parker is the CEO of http://www.RepairMyCreditNow.Com (RMCN Credit Services, Inc.). For more information on http://www.RepairMyCreditNow.Com or to learn more about Cerdit Education & Restoration, log on to http://www.RepairMyCreditNow.Com or call (888) 4-MY-REPAIR to speak with a customer representative.
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