What Affects My Credit?

Most people ask “how to improve my Credit Score?” the reality is you have to understand what affects your credit first. Your credit score is an important number it can make your life a little easier and it can make your life a little harder.  Your credit score can keep you from ever owning a home or getting a car loan without

having to pay nose bleed rates.  Your credit score can even keep you from getting a job in today’s world.

The problem is that most people don’t know, what are the factors that affect their credit?   This is not going to be an end all of what affects your credit but should give at least give you an understanding.   Most lenders use what is called the FICO method which stands for the Fair Isaac Corporation.   There are 3 major bureaus that lenders use, Experian, Equifax, and TransUnion.   Each credit bureau uses their own system but for the most part they are all derived from the FICO system.  Experian uses what is called the Risk system, Equifax uses what is called the Beacon and TransUnion uses the classic FICO system.  So lets start on some of the factors that affect your credit so you may better understand the ways to improve credit score.

1)      35 percent of your score is based off of the history on your payments to your creditors.  The more recent the activity the more impact it will have on your credit whether it be good or positive.  This have big impact since one of the reasons for checking your credit is to determine whether to loan you money and seeing you have paid others in the past sometimes can be an indication of how you may pay them.   The score is affected by how late you have paid how many bills you may have as well as do you have collection payments or bankruptcies.

2)      30 percent of your score is based on how much of a debt load do you have. The greater amount of debt that you have can affect your credit score.  How much do you have in car loans or home loans?  Also credit cards and their limits how many of them do you have maxed out?  It is usually a good idea to keep your balances at half of what your credit limit is.  Any time you start maxing out your credit limit you start losing points.  It shows that you are maxing out your credit and over extending yourself.

3)      15 percent of your score is also based off of the length and you have had credit. The longer you have been able to establish your credit the better, since a payment history begins to develop and a pattern begins to form.

4)      10 percent of the score is based on new credit that can have a negative impact on your credit report.  This only affects you for a short time and also includes the inquires that you have which are when you are applying for new credit.  Too many inquiries in a short time period can have a dramatic negative impact on you credit report.

5)      10 percent is based on the type of credit you have, such as having too many credit cards which is revolving debt can have a negative impact on your credit.

The importance of your score will become very apparent when you apply for a loan whether it be to buy a home or a car loan.  Even credit cards will charge someone double the amount of interest to someone with bad credit vs someone with good credit.   If you want to have your dream home within reach and an affordable car loan best thing is to keep your credit score healthy.  If your score is not at its best then the best thing to do is to get your score up you just need to do the work and learn the systems.   What ever system you use to help improve your credit score keep in mind it well require you to learn a few things and require work on your part but it is do able, and improving credit scores can be a reality for you if you are willing to learn and do some work.

I hope that this was of some help please help me in providing good and useful information and leave me comment.  I promise to get back to you asap.

Thank you

Ernest Flores

    For more information and ideas on how to fix credit and improve your credit score stay tuned for more information but the reality is that learning about your credit or at least getting a handle on how to improve your credit is a wise investment not only for today but in your future. You have the choice of paying thousands of dollars to a someone to do the work for you or you can learn how yourself and take control of your financial future and the choices you make but it can be done. I wish the best and many successes in your future if you found that this information was helpful leave me a comment. Ernie Good Luck To Your Many Successes Important Disclaimer: Questions and answers provided on this website and blog is to be considered general information, and is not intended to substitute for informed professional financial, tax, legal, investment, accounting, or other professional advice. This blog and its content is copyright of www.IFixBadCredit.net. All rights reserved. Any redistribution or reproduction of part or all of the contents in any form is prohibited other than the following: you may print or download to a local hard disk extracts for your personal and non-commercial use only. You may copy the content to individual third parties for their personal use, but only if you acknowledge www.IFixBadCredit.net as the source of the material You may not, except with our express written permission, distribute or commercially exploit the content. Nor may you transmit it or store it in any other website or other form of electronic retrieval system without obtaining www.IFixBadCredit.net permission.

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