Low Credit Score

Low Credit Score

Why have I been declined for credit?
If you have been declined credit in the past and don't understand the reason, it may be time to review your credit report. There may be listings on your credit report that are not yours, that are paid and show delinquent, or an account you thought you paid and hadn't. A US government report suggests you check your credit report once a year! Credit experts profess even more frequently! Prevent Identity Theft loss! Review your credit report now! FreeCreditReports360.com

A low credit score is caused by negative listings, high debt and other factors on your credit report. This may cause you to be denied for credit or qualifying only if you pay higher interest on purchases, credit cards, and home loans.  This may be because of poor performance in your credit history, incorrect information, credit fraud or identity theft. Bad Credit Information -  Improve Credit Report - Raise Fico Credit Score

Inaccuracies in a credit report may be the result of simple human error. You may have a lower credit score than you deserve because of a simple mistake. Whether the inaccuracies relate to payments not credited, late payments, data mixed in from the credit file of someone else, fraud or identity theft, dispute inaccurate information promptly.  FreeCreditReports360.com   includes link to dispute inaccurate or misleading listings!

If there are listings on your report that are inaccurate or misleading dispute them with the credit bureau. That is basic credit report repair. Identity theft, fraud, divorce or other issues can cause legitimate debt to land on an innocent parties credit report. 

Sometimes there are technical issues about negative listings on your credit profile that a professional can identify and  resolve. If you are unfamiliar with credit reports it can be a hassle. Take a look at a professional credit report repair service with a proven track record. Low cost online credit repair source Credit Repair

• Equifax
  P.O. Box 740250
  Atlanta, GA 30374
  (800) 525-6285

• Experian
  P.O. Box 1017
  Allen, TX 75013
  (888) EXPERIAN
  (888) 397-3742
  Fax: (800) 301-7196
  
  

• Trans Union
  P.O. Box 6790
  Fullerton, CA 92634
  (800) 680-7289

Credit allows you to make a purchase without ready cash. You receive credit by promising to pay in the future for something you receive in the present. Credit usually costs something and must be paid back.

A credit report is a report complied by an agency that collects credit histories, then distributes that data to credit grantors and the public. The credit reporting agency collects data from lenders, utility companies, collection agencies, landlords and court houses. When you apply for credit, a job, insurance or an apartment the credit  grantor will review your credit report before approving or declining your application. Your credit report helps a person that does not know you decide if you are credit worthy.

Ideally, your credit report is an accurate, up-to-date reflection of your credit history. However, we don't live in an ideal world, there are many reasons that your credit report could contain inaccuracies that might prevent you from receiving the credit you deserve. The good news is you can take action to keep your report accurate.
 

Avoid a low Credit Score.

With your Credit Score being the doorway to financial health I thought I would give some tips on what to avoid so your credit score is not affected. If your credit score is currently low I guarantee that you are paying too much to your creditors. Any business that is in business for profit is looking for a reason to make money. If a creditor knows your credit scores are low they will charge you for it. The reason is because they can. Here is what to avoid so your creditworthiness is not affected.

Late Payments
This is one credit dink I see all the time. If you are late on a obligation that reports to the credit bureaus I assure you that your score will drop around 75 to 100 points. Timely payments account for 35% of your overall FICO score. This particular factor in your credit score is the biggest factor of all.

Amounted Owed
If you have credit card debt, and the balanced owed vs. the allowed credit limit is more than 30%, your score is affected. The amount owed accounts for 30% of your overall FICO score. You should keep your credit debt well below 30% of the allowed credit limit.

Length of Credit History
Once you are granted some credit the FICO score model looks at how long you have been in good standing with your credit. If you have a good history with your creditors, you can count on it helping your overall credit health. The length of your credit history accounts for 15% of your score.

Mix of Credit
Mix of credit accounts for 10% of your FICO score according to Fair Isaac. So you need credit cards, installment loans, auto loans, department store credit, etc...... The rule of thumb is to have at least 3 to 4 lines of different types of credit to get the best overall score.

New Credit
New credit accounts for 10% of your FICO score. The FICO score model does not like to see you applying for too much credit. Too many hard credit inquiries will affect your credit score. The rule of thumb is around 3 to 4 different types of credit.

Identity Theft & Credit Monitoring
Make sure you are pulling a copy of your free credit report regularly. With the identity theft problem it is recommended to set up some type of credit monitoring with immediate alerts. So if something happens you will know about it quickly.

Co-Signing
Co-signing is a big problem as well. We don't recommend co-signing for anyone. If a family member or friend does not have the credit to buy, the best thing they can do to get credit established is to get a couple of secured credit cards. This is the fastest way to improved credit health. With a little history, usually 12 months of good payment history the creditors will open the doors of credit.

About the Author: Mike Clover is the owner of http://www.creditscorequick.com/ . CreditScoreQuick.com is the one of the most unique on-line resources for free credit score report, fico score, Internet identity theft software, secure credit cards, and a BlOG with a wealth of personal credit information. The information within this website is written by professionals that know about credit, and what determines ones credit worthiness.

© AboutMyCredit.com 2007
Updated 07/16/08

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