How does the credit score point system actually work?
Question by tak3032: How does the credit score point system actually work?
I want to know how do they determine the credit score point system. I know what is credit and how it works. But I want to know the numbers part like if someone runs your credit report it takes off 2points from your score, another is what if your late on your payment how much does it take off then and if I have a loan for a certain amount does that mean I get a big score or a low score? I have some old accounts (5yrs old) that need to be paid off but if I do pay them off will it really make a difference on my score? Next thing you know I pay them off and then my score only goes up by 4 or 5 points or will I even get a point. What would be the purpose then? At the same time if creditors do look at my report yes it would show paid off but the history would still show that I was delinquent for 5yrs. Whose gonna want to give me a loan any ways? Basically what is the point system and how is it calculated? Let me know so I can start to repair my credit. Much thanks and I appreciate it!!!
Best answer:
Answer by Still reading
You will get a lot of answers about how to work on your credit score. The system is proprietary and held very closely by the company which owns the system–Fair Isaac. Many people with experience with a lot of borrowers have seen specific actions affect individual credit scores. And, they can give you recommendations. But, honestly, the only way to “fix your credit score” permanently is to pay off the bills you owe. Your score may not be immediately impacted, but this action will reflect your earnest attempt to deal fairly with those who have lent you money in good faith. There are no instant fixes, but you have a better story to tell if you can say that you had loans delinquent for 5 years, but when as soon as you were able, you began to pay them off and are now handling your credit responsibly. You’re right in the supposition that no matter how many delinquent accounts you pay off, you won’t see a quick improvement in your score. But, you might find individual lenders willing to take a chance on you. And, once you get some new credit (after paying the old bills) and handle the new credit well, you’ll build your score slowly and steadily back to where you need it to be. It took years to earn a low score; it will take considerable time to prove that you’re a worthy borrower.
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Q&A: What credit score is needed to get home loan?
Question by gaikhur: What credit score is needed to get home loan?
I have 680 credit score and I also would pay at least 20% down payment for $ 150,000 worth of loan if it is approved. I have also one year history of car loan which was paid in time. Please suggest me,would l be eligible to get home loan with low interest rate? Or I have to pay more down payment? Or wait 4-5 months and more so my credit score will be atleast 720 and more ?
Best answer:
Answer by Judy
20% down payment is good, but 680 credit score could be a problem – you’d have better chances if you can get it up to 720.
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When can I start building my credit score?
Question by Benjamin Franklin: When can I start building my credit score?
I am 16 years old and would like to know when I can start building my credit score? What will be a starting credit score? How can I build my credit score to be as high as possible? Thanks. Serious answers only please.
Best answer:
Answer by RantingLover
You can start building your credit when you’re 18 (in the USA at least). You increase your credit score by not going over your credit limits, paying on time, and not carrying a balance on revolving lines of credit (like a credit card).
Edit: You used to be able to be added to another person’s credit card and that would begin your credit history, and yes that could be done at a young age. But FICO does not take into account authorized user accounts any more, so you can’t do that any more.
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Categories: Credit Score Questions Tags: Building, Credit, Score, Start
What is a good credit score and how to improve it?
Question by cornerblitz13: What is a good credit score and how to improve it?
Sorry, multiple part question: What is the highest credit score possible and what is the lowest possible? What can you do to improve it? And the myth that using your ATM Debit card as credit can actually improve your credit score, is it true?
Best answer:
Answer by mburleigh8
Best score i think is 850
good things to improve credit
Pay your bills as soon as you get them, quickly paying makes them happy.
ATM/Debit, is a myth This doesn’t really go towards your credit score because you are not truly borrowing $ . Its $ you already have.
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Categories: Credit Score Questions Tags: Credit, Good, Improve, Score
Is my credit score weak because I only have 6 months of credit experience?
Question by natashaiera: Is my credit score weak because I only have 6 months of credit experience?
I got a letter back and my credit score is only 665. I only have 6 months of credit history, but all of my credit cards do have a pretty high balance, although I pay them all on time and I just opened an account with AT&T last month. Is my credit going to stay this bad as long as I keep a high balance on my credit cards? Or is it just high because I do not have a lot of credit experience?
Best answer:
Answer by jlf
Both. High balances and a short credit history both lower your credit scores. Get the balances down (they are also costing you lots of interest). The short credit history self-corrects with time.
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Categories: Credit Score Questions Tags: because, Credit, experience, months, only, Score, weak
Q&A: What’s the importance of knowing your credit score when the creditors run your credit anyway?
Question by AMEFIKA: What’s the importance of knowing your credit score when the creditors run your credit anyway?
When I apply for loans and tell the creditors what my credit score is they still run my credit. All the reports I read talk about the imporatnce of knowing your credit score and that’s fine. But what’s the importance of knowing my score when the creditors run it anyway? Also, how do we know that the rates that we qualify for are true based on ourcredit score? Is there a chart tat we can put our credit score up against and it tells us what rates we qualify for?
Best answer:
Answer by Soxfan
Not everything is based on score but in large it is.
Knowing your score allows to to shop for the best interest rates. In other words, it enables you to be an educated consumer.
If your credit score is high and you have good credit then anyone will give you financing so you are better off researching to see if you can get a better rate etc somewhere else.
In short, being educated before shopping gives you the best chance at the best product.
Also, keeping track of your score and what is on your credit files keeps you assured that no one has stolen your identity and to make sure that nothing gets erroneously reported by a creditor – a quick fix will save you tons of heartache later on.
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Categories: Credit Score Questions Tags: anyway, Credit, creditors, importance, knowing, Score, What's
How long will credit score take to return to normal after opening a new credit card?
Question by Jared: How long will credit score take to return to normal after opening a new credit card?
I recently opened a new credit card and noticed that my fico score plumetted 50 points after doing so. How long will it take for credit score to get over the fact that I opened a new account and regain those 50 points?
Best answer:
Answer by chic_chic1989
1. How many credit cards did you open within the past 12 months? If you open 2-3 cards in a year, this flags you as a “high risk” for lenders.
2. Have you checked your credit report? Are you sure you’re not missing any payments? This also could lower your score.
I would suggest for you to check your credit report and see what’s going on. It’s weird that your score went down for 50 points after opening a card. There are a lot of factors to determine how long and how much your score will go up so it’s hard to tell. As long as you keep your cc balance low, your score will go up little by little.
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How much does your credit score increase with excellent payment history for 8 months?
Question by jhhlawrence: How much does your credit score increase with excellent payment history for 8 months?
When I bought my car in November my credit was seriously lacking. Credit score was in the 300’s somewhere. I don’t know much about credit but I know that’s horrible and I only have myself to blame. But in the last 8 months I have paid more than my required monthly amount and have not been late once, not even into the grace period. How much will that raise my credit score? Any answeres would be greatly appreciated!
Best answer:
Answer by MadMan
Not really possible to say as there are lots of variables. You should get you credit report, for free from www.annualcreditreport.com, to check that your lender is reporting your payments to the credit bureaus.
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Q&A: How to raise my credit score once my credit cards are paid off?
Question by Mcnizzle: How to raise my credit score once my credit cards are paid off?
How can I continue to raise my credit score once both of my credit cards have been paid off?I don’t plan on using either one of them unless its an emergency,but I don’t know how to keep getting my score to go up after that.Is there a way to get negative reports taken off my credit report?
Best answer:
Answer by malica
Negative reports will only be taken off your report once enough time has passes. In the meantime you have to demonstrate that you can use credit responsibly, so not using your cards isn’t going to help you. What you need to do is find some small to reasonable purchases you were going to make anyways (like groceries, or gas) and use your card and pay it off in full each month and on time. Don’t spend more than 30% of your limit on any card and like I said – make sure you pay it off on time. If you pay the full amount each month you won’t be charged any interest, so it’s not going to cost you any money to do this.
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Q&A: How do I switch credit cards and not affect my credit score?
Question by msc44: How do I switch credit cards and not affect my credit score?
I want to get a frequent flyer credit card but I already have 3 credit cards with generous limits. I don’t need these credit cards and I would like to cancel them and have this “possible credit” to go towards the new card. I heard once that canceling a credit card has a negative effect on your credit score. Is this true? If so, how do I switch credit cards and avoid affecting my credit score in a bad way?
Best answer:
Answer by Serge M
Yes, it is true. Having active credit cards on your record is no problem. It shows that card issuers are willing to extend credit. If these cards have no balance on them, you should have no trouble getting a new card. Apply and start using it.
If there are balances on your other cards, it is a different issue. You should pay them off, or transfer them to the card with the lowest interest rate and pay that off as quickly as possible. Then make sure you never have a balance on a card that exceeds about 30 percent of the credit limit.
Paying the monthly charges in full each month is the best policy. It also means not paying any interest.
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