creditinfo

Fico Scores

Your credit score also known as a FICO score has become such an important factor in the lives of many Americans. It' s used to determine how much you can borrow, how much you pay for life insurance, if you can rent a home, and it can be a factor in determining the interest rate you pay on a credit card or home loan.

Paying your bills on time, every month, is the single most important factor in determining your credit score. Your payment history accounts for approximately 35% of your total score.

By taking advantage of your bank's automatic payment function, a simple calendar, and/or by calling your creditors, you can ensure you never again pay your bills late.

Credit Tips and Info

Inquiries into your credit report (when businesses pull your credit) decreases your score each time its done. It could affect your score 8 - 20 points per inquiry.

Derogatory items that could negatively effect your credit score even more than late payments are collection accounts, forclosures, repos, bankruptcies and liens. All of these including the lates stay on your credit for 7 years.

Your credit score can be impacted by derogatories, too much credit, too many job changes or high balances on revolving credit. Your balances should be below 30% of your credit card limit. For example, if you have a credit card with a limit of $1000, your balance should not exceed $300.

Closing credit card accounts can actually lower your credit score. You lose credit history when they are closed. You should continue to charge small amounts on all credit cards and pay them off immediately.

The big three credit bureaus, Equifax, Experian and TransUnion, process huge amounts of information. A 2004 study found that 25 percent of the credit reports surveyed had errors that were serious enough to cause consumers to be denied credit.