Six Things You Should Know Before You Repair Your Credit
Make Sure You Get Your “Real” Scores!
Most lending institutions use scores calculated by FICO (also known as Fair Isaac) and derived from your reports with the major national credit bureaus Equifax, Experian, and TransUnion. Be careful as the credit scores sold at freecreditreport.com, TrueCredit, CreditExpert, and other often used credit report evaluation services provide different scores than the ones that lenders use! Most of these packages aren’t as free as they seem and their ‘knock-off’ scores can be much lower or higher than your FICO scores. Don’t even bother with these services! More info on credit score repair can be found at Home Loan Credit Score.
There are 5 Major Areas Considered in Your FICO Scores
Making all your payments on or before their due dates is the most important part of a solid credit report and score. You need to consider though , only 35% of your FICO scores are have to do with your payment history! In other words , any type of bad information – no matter what it is – only affects that 35% of your credit score. The rest of your scores are based on your activity with your current accounts, how long you’ve had a credit history, what kind of accounts you use and how you acquire new accounts. It’s always crucial to maintain healthy accounts (particularly credit cards) and use them wisely.
Paying or Disputing Some Accounts Can Hurt Your Scores
Another thing to consider is , simply settling accounts that have been sent for collection will have do very little to make repairs on your credit scores. From time to time it can even alert lenders to the presences of the account and be re-reported, harming your scores! Credit scoring is an intricate algorithm where even fixing unfavorable information can unwanted results on your scores; this is not an area where common sense applies . There is a very strategic way to approach your credit card debt, your collections, and especially your medical bills – don’t jump to conclusions before talking to a professional!
Don’t Close Your Accounts!
Canceling accounts will never help your credit scores – not only will you lower the credit you have open , but also shorten your credit history length in many cases instead of allowing those accounts to add to your credit history length . Don’t rock the boat! Maintaining a stable, lengthy, and diverse credit history with at least one major credit card is necessary to build a good credit score . Believe it or not even paying off an installment account like a car loan or student loan could actually hurt your credit scores? In some cases it isn’t wise to completely repay a debt without talking to a credit professional.
New Negative Information Can Drop Your Scores 40-80 Points
When you decide to repair your credit , make sure you map out a budget so not to overextend yourself and watch your mail for notice of new collections carefully . Just one new 30 day late payment or collection can reduce your FICO scores 40 to 80 points! Don’t let anything be overlooked and affect your progress as you fix your credit standing.
It Only Takes 45 Days to Turn Things Around
You may have heard your credit is injured for 7 to 10 years before you can recover enough to buy on credit again. Luckily, you can find ways to repair your credit much more quickly than that . Though working to repair your credit on your own can take years and hiring a credit repair company can take many months , with the right approach you can find ways to better your credit in just one and a half to two months . By using the right credit score professionals, you can help to make you credit score increased again. If you correctly work to address every area considered by credit scoring models you can get the best results in the fastest amount of time . To learn more about how to improve your credit score and learn how to find the right Credit Score Professionals visit Home Loan Credit Score.
