Myths and Truth about Credit Scoring

Credit score is the key factor determining approval of almost any type of credit. It is based on the information contained in your credit report files. The widely used FICO score was developed by Fair Isaac Corporation, and it is a formula which assesses your potential credit risk.

The information used to calculate credit score can be broken down into five major parts. Your payment history with banks and other lenders will account for 35% of the score, the amount of money you owe for 30%, and the length of your credit history for 15%. New credit and a statistical assessment of how healthy your credit mix is will both account for 10%.

Credit score is not based in any way on the following information:

- references to debt management or credit counseling programs.
- person's marital status.
- current employment status, including how long with the same employer.
- credit report inquiries made by you, employers, insurance companies, or banks if made without your knowledge.
- what interest rates are charged on your credit cards, etc. - public assistance received.
- person's age.
- child or family support received.

You can increase your score by:

- always paying bills on time.
- paying off or reducing credit card and other debt.
- keeping old, unused credit cards, departments store cards and other "revolving" credit accounts open, even if you don't use them.
- not applying for credit very often.
- correcting mistakes on your credit reports.

Banks decisions are made according to their own standards.

While the majority of lenders use credit score as a key factor in approving credit, other facts play their parts as well, among them: your income, employment status and length of time at present address, to name a few. Each bank has its own standards. What score is acceptable for a particular loan or credit product depends solely on a lender. The person's credit score might not be high enough to get credit with one bank, and perfectly acceptable with another.

More about credit score and tips on improving your credit can be found at: How Much? - Comparing financial products.

Senior staff member for How Much?
http://www.howmuchanswers.com/

---

What is the Check 21 Act?

Check 21 is the common name for the Check Clearing... Read More

Credit Card Balance Transfers Can Help You Stop Putting Money Down The Drain

As you probably know, interest rates are at all time... Read More

Credit and Its Cost

What is Credit? Credit is money granted by a lender... Read More

Useful Tips When Choosing Credit Cards

Chances are you have received your share of "pre-approved" credit... Read More

What You Need To Know About Credit Cards

What is a credit card? A credit card is... Read More

7 Surefire Ways To Repair Bad Credit

Do you have a poor credit rating? If so, you... Read More

Which Credit Bureau Should I Use To Check My Credit Report?

There are three main credit bureaus in the United States;... Read More

Shoppers Beware - Tis The Season

It's the number one complaint from consumers and it only... Read More

How Credit Scoring Works

The all important credit score! It determines the amount of... Read More

Have You Ever Opened a Checking Account?

Maybe some of you are saving it in your trusty... Read More

3 Ways to Improve Your Credit Score by 50 Points In Less Than 30 Days

In Less Than 30 Days. "What can you do to... Read More

Can You Acquire Good Credit Overnight? You Bet

Your credit file may not reflect all your credit accounts.... Read More

Which Credit Card?

Bewildered by the sheer variety of debit cards and credit... Read More

A No-Brainer Way Of Getting Credit And Credit Cards

What Is Your Credit Rating Now?If you have any charge... Read More

Student Credit Cards

STUDENT CREDIT CARDS With graduate debt averaging... Read More

Your Credit Card May Be Costing More Than You Think!

Do you know what your credit card is truly costing... Read More

Is Your Credit Score Being Held Against You?

Credit Scores That HurtIs your credit score being held against... Read More

SuperCharged Secret 5, Credit Card Utopia

LIVING IN CREDIT CARD UTOPIALet's just take a brief moment... Read More

Will Inquiries Lower Your Credit Score?

What are inquiries?When you apply for credit the creditor or... Read More

Debit Card vs. Credit Card, What Are The Differences ?

Ah, the "good old days". If you are a baby... Read More

Understanding Your Credit Score

When you apply for credit one of the first things... Read More

Credit Card Entrapment - The Secrets are Out

Have you ever wondered why your credit card bill is... Read More

Why Americans Find Predatory Lending Offensive

"Menis - the author translates as "indignant rage" - It... Read More

Winning The Credit Game!

Everywhere we go, the word credit can be found, shining... Read More

5 Surefire Ways To Eliminate Credit Card Debt

Do you have enormous credit card debt? You are certainly... Read More

The Credit Card Surprise That You Need to Look Out For

Companies that issue credit cards want to make a profit.... Read More

Bad Credit Loans For Those Who Seek Alternatives for New or Old Car

You can still save money on a Bad Credit Loan... Read More

Identity Theft Exploding: Here?s How You Can Avoid Becoming A Victim

Americans are more concerned about identity theft than unemployment or... Read More

Credit Cards, Merchant Accounts, and Your Bottomline

Q: I'm opening a gift shop and want to be... Read More

Credit Report ? How Your Credit Score is Determined

Most consumers are aware that they have something known as... Read More

Home Loans ? Repair Your Credit Before You Buy

Before you take out a home loan or make any... Read More

Do You Know Whats On Your Credit Report ?

It is important to know your credit rating for a... Read More

Types of Credit Cards

There are a whole variety of different types of credit... Read More