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What
is your credit score and how does it affect you?
Getting
your Credit Score report can help you:
- Understand
your total credit picture.
- Improve your
credit with a personalized analysis of your report.
- Learn what
factors may influence your credit rating.
- Know your credit
standing before applying for credit.
- See how your
credit score compares to other US consumers.
About your Credit Score:
Credit scores are based on the information in your credit
bureau record. The majority of CreditXpert Credit Scores(TM)
are between 400 and 900. Higher scores are better. With a
high score, you have a good chance of getting the credit and
loan(s) you want. Keep in mind that when lenders consider
a loan or credit application, they generally ask for more
information because credit scores are not the only factor
they use in making decisions. Typically, this includes personal
data (such as income and monthly payments) used to determine
your ability to pay.
What your Credit Score means:
Currently, your CreditXpert Credit Score(TM) will make it
difficult for you to get the best offers, especially for credit
cards. Be prepared to pay higher fees and interest rates,
as well as make deposits and down payments. Also, you may
not be able to get high credit limits and/or high loan amounts.
However, if you demonstrate that you are reliable by always
paying your bills on time, your credit score can improve significantly
within a year.
What this Means to You:
Both negative and positive factors influence your credit score.
The most important factors of each are listed below, in order
of importance. Remember that these factors vary in how strongly
they impact your credit score. For example, if you have a
very high credit score, the negative factors in your analysis
are likely to have a small impact. The same is true for positive
factors if you have a very low credit score.
What
factors lower your credit score:
Payment
History : You owe $19,500 on accounts for which you have
missed a payment.
This only includes your open accounts. This is making your
score lower. Missing payments is a negative factor. Some cases
are worse than others. However, if you have not missed any
payments recently, lenders may think you have become responsible
and will no longer miss payments. Also, missing payments on
only a few accounts is not as harmful as missing payments
on most or all of your accounts, because lenders realize that
many people miss a payment (or pay late) once in a while.
Also, missing a single payment is not as harmful as missing
several consecutive payments because many lenders consider
missing 3 or more consecutive payments as an indication that
you may never repay them. Finally, it is not as harmful to
miss payments on accounts with low balances rather than high
ones because lenders stand to lose less money on low balances
if they remain unpaid.
Bankruptcies
: You have one or more bankruptcies listed in your credit
report.
This is
making your score lower. Any record of bankruptcy in your
credit report is a very negative factor. A bankruptcy is less
harmful to your credit score if it occurred many years ago
(rather than recently) because lenders may believe that you
regained control over your financial responsibilities. In
any case, bankruptcies will very significantly impact your
ability to obtain new credit, and new loans will likely involve
a deposit or high fees and interest rates. Note that bankruptcy
records on credit reports usually disappear 7 to 10 years
after the filing date of the bankruptcy. When this happens,
it will have a positive effect on your credit score.
Length
of Credit History: The average age of the account(s) in
your credit report is 7 years and 5 months.
This is
making your score lower. Having had credit accounts for a
long time is a positive factor because your history gives
lenders information to evaluate how you typically use credit
and repay your debts. Credit reports with approximately 30
years of history are considered optimal. Meanwhile, up to
7 years of credit history is considered short, and less than
3 years of history is considered too little. It is worth noting
that your accounts may have been open longer than your report
suggests, if lenders were slow to report them to the bureaus.
What matters is how long your accounts have been in your report.
What factors raise your credit score:
Credit
Accounts: You have 5 accounts listed in your credit report.
This is making your score higher. Having accounts is a positive
factor because it gives lenders information to evaluate how
you pay your bills. However, having too many accounts is usually
considered a negative factor because lenders worry that you
are spending (or preparing to spend) beyond your means, even
if you have not missed payments in the past. Also, if you
do not have credit (a negative factor), obtaining your first
credit cards may be difficult, and it may involve high fees
and interest rates, as well as low credit lines. Note, finance
trades (debt consolidation accounts with high interest rates)
are considered a negative factor, because they are often associated
with troubled credit histories.
Payment
History: Last reported month, you did not miss a payment
on any revolving account. This only includes accounts updated
in the past 3 months. This is making your score higher. Missing
payments is a negative factor. Some cases are worse than others.
However, if you have not missed any payments recently, lenders
may think you have become responsible and will no longer miss
payments. Also, missing payments on only a few accounts is
not as harmful as missing payments on most or all of your
accounts, because lenders realize that many people miss a
payment (or pay late) once in a while. Also, missing a single
payment is not as harmful as missing several consecutive payments
because many lenders consider missing 3 or more consecutive
payments as an indication that you may never repay them. Finally,
it is not as harmful to miss payments on accounts with low
balances rather than high ones because lenders stand to lose
less money on low balances if they remain unpaid.
Credit Usage:
You are not using any revolving accounts at more than 70%
of their credit limit. This only includes your open accounts
for which the credit limit/loan amount is available. This
is making your score higher. High usage (balances above 50%
of the credit line) are usually considered negative, because
lenders worry that you may be using more credit than you can
reasonably afford to repay. Being "maxed out" on
a credit card (when your balance is close to or above the
assigned limit) is especially negative. The more accounts
in this situation, the more it impacts your score. Note that
in some cases, such as very high credit scores, as little
as 20% usage may have a negative impact, although minor. On
the other hand, low usage is usually considered positive because
it provides lenders with information on how you use credit,
and because it shows that you do not need to use all of the
credit available to you.
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