Terry Edwards asked:




Repairing your credit can easily save you thousands of dollars over your lifetime, as well as a lot of frustration. A good credit score essentially means you have access to lots of capital. If you want to have a nice home or a nice car then you have to have a rock solid score. It’s important to understand that the three major credit bureaus are the judge and jury when it comes to your credit rating. But unlike a conventional judge and jury, credit bureaus do not allow you to defend yourself before they render their verdict.

Many otherwise intelligent people forget that credit bureaus exist to make a profit and their decisions are not necessarily the most reliable. These bureaus often exchange information with each other regarding your credit history. They have also developed very strange rules for what kinds of things adversely affect your credit. If, for example, your credit report is pulled frequently within a short period of time, you can lose points on your credit rating because of it. This rule appears to have been designed to allow businesses to reduce your rating by repeatedly pulling your file.

Within the credit bureau system you are essentially guilty until you can prove you are innocent. Once a verdict has been rendered against you the only way to remove it is to show contrary evidence. However, if you can show that a charge is incorrect then the bureaus are required by law to remove the erroneous charges. Repairing your credit rating is all about carefully examining your credit and presenting information to the bureaus that forces them to remove negative items from your ratings history. Many companies online charge a small fortune for credit repair, but in many cases you can just as easily do it yourself.

Your rating and the information contained within it are of no consequence to anyone but you. That’s why you are the only person who can really do anything to improve your credit score. Credit rating repair doesn’t necessarily have to be performed by you, but it’s not necessary to pay a repair agency to fix your history for you. By doing a little snooping online you can find many legal and reliable self-help programs that can help you fix your credit by yourself in a quick amount of time. The self help credit rating repair systems are much cheaper than paying someone to repair it for you. In addition, you have much more control over the entire process, not to mention added security and peace of mind.

Although credit bureaus don’t seem to think so, most people generally deserve a second chance. If your credit rating isn’t looking so hot then you need to take action to repair your credit. Just raising your credit score a couple dozen points can make huge a difference in your life.

Holly

Joseph Kenny asked:




What do you know about your credit rating? You may never even think about it until you get turned down for credit one day. However, the way you run your life may affect the way your credit profile looks years later.

Who Stores Credit Information?

There are two main agencies that store information about your credit history. They are Experian in Nottingham and Equifax in Glasgow. The credit file is opened the day you open a bank account. The longer you have had a bank account, the more trustworthy you seem, so it’s best to keep one primary account for the sake of the credit report. That doesn’t prevent you from having a second account that might offer other incentives, such as a better overdraft limit or interest rates.

Your credit score goes up depending on what services you have from the bank. So, if you have a cheque account, a savings account, a credit card and other products, this means the bank trusts you and is a big plus for your credit status.

On A Roll

Whether you decide to vote or not, it is a good idea to appear on the electoral roll. This makes it easy to track and confirm your address details. Lenders will be concerned about whether you own or rent your home, or whether you are living with parents. Owning your own home is a sign of responsibility, and the fact that you have been approved for a mortgage looks good too. It’s best to have a telephone at home. If it is working, it means that you are up to date with your bill.

Stability And Responsibility

Responsibility is also the key factor when it comes to marriage and children. Being married with children means, in theory, that you are responsible. It also means that you are less likely to run off, leaving bad debt behind you. And the older you get, the more responsible you look in lenders’ eyes, so there are some advantages to ageing.

Having a job is an indication that you will be able to repay any credit that you get. Again, staying in the same job for a while indicates responsibility. Lenders like to see some history of earning an income before they approve a loan.

Managing Credit

Finally, having credit really helps your credit rating, as long as you have managed it well. Having credit agreements is good, as far as lenders are concerned. Making the necessary repayments on time is even better. Missing payments or defaults will lower your credit score, so they are best avoided.

If you do end up with a debt problem, arrears or County Court Judgements (CCJs), you may still be able to get credit. There are options such as payday loans for short term credit and secured loans for long term credit. There are even credit cards that cater for people with a poor credit rating. However, the interest rates will not be as good as those offered to people with a good credit report.

Gabriel

Pauline Go asked:




A credit rating is a formal assessment of a corporation, autonomous governments, individuals, conglomerates or even a country. Credit rating is evaluated on the basis of financial transactions carried in the past and assets and liabilities at present. Credit rating allows a lender or a credit granter to evaluate the ability of the borrower top repay a loan.

In case of personal credit rating, the financial statistics of an individual is studied by a credit rating agency. These agencies are called as credit bureaus. They keep a record of the credit history of an individual. Generally, a fee is charged for allocating a credit score. The agency then allots the individual a 3-digit score called the FICO credit score.

Credit rating is very important. You need to manage a healthy credit score, especially if you are planning to borrow a loan or buy a real estate or an automobile. A low credit rating is considered as a sign of a high risk of non-payment of debt.

Credit rating has the power to qualify you for more credit card offers or rule you out for many credit card offers. Moreover, credit ratings are used to ascertain the amount of a utility or leasing a deposit. It is also used to adjust insurance premium. The ratings are also important to substantiate an individual’s eligibility for employment.

Important credit bureaus in the United States are Equifax, Trans Union and Experian. Major credit bureaus for individuals are Equifax, Experian and Trans Union whereas Moody’s, Standard and Poor’s and Fitch are leading global credit rating agencies.

Thelma

W. A. Leon asked:




You may be familiar with the 3 C’s of Credit – character, capacity and collateral. These three factors are considered by creditors before extending a loan to someone applying for credit. However, there is a fourth factor that must always be considered by credit consumers. I will discuss the fourth C shortly. But first, let’s review the 3 C’s of Credit.

The first of the 3 C’s is character. If you have good character, you will assess the risk of the loan before applying and determine whether or not you can repay the debt. If something happens in your life that makes repayment difficult, an honest person will contact the creditor immediately, explain the situation, and make arrangements to repay the debt as soon as possible.

The second C is the capacity to pay debts. Creditors will assess your household income, employment history, and other factors to determine whether or not you are capable of honoring the terms of the loan. If you are gainfully employed, your situation is stable and you are more likely to make loan payments on time. If you have a steady work history, creditors will consider you to be a good credit risk.

The third C is Collateral, which is any personal property you used as security for a loan. If you are unable to repay the loan, the creditor can secure a lien on your property and sell it to cover the amount of the debt. Thankfully, it is not necessary for you to include collateral as part of your loan application. Also, creditors tend to put more weight on your character and capacity to pay.

Another factor that creditors consider is what I’m calling the fourth C of credit. In fact, this factor is the one most discussed often by creditors and by those seeking credit. The fourth C is your credit rating.

You should make every effort to keep your credit rating as high as possible. The overwhelming majority of creditors will review your credit report after you apply for a loan. Many credit decisions are made without considering your character or your good intentions. If you have a low credit score, you are automatically considered to be a bad credit risk.

At some point in your life, you will need credit. Exercise good character, make sure you have the capacity to repay loans, and avoid using collateral. Finally, keep your credit rating high. Your financial life will be much easier if you pay attention to the 4 C’s of credit.

Jay

Hans Bool asked:




When you search the internet for the largest credit rating agencies you are offered a top 3 led by Moody, Standard and Poor’s (S&P) and Fitch Ratings.

S&P is part of a larger company: McGraw-Hill Publisher. And this relation can help to explain some basics about credit rating companies.

Both S&P and McGraw-Hill are publishers and both can be seen as brokers of information. McGraw-Hill’s brokerage is focused on different markets in which supply of information (mainly books of writers) is matches with a demand for information (schools and academic institutes).

S&P is in nature not different that the publisher it is part of. But there are a few differences.

McGraw-Hill will publish books in their mission to provide “essential information and insight that help individuals, markets and societies perform to their potential” (source: mcgraw-hill.com).
S&P will publish information that is also essential but for financial decision makers. In the first case the information is a basis for parties to learn in general, in the last case the information influences the financial market movements by influencing the value of investment instruments (bonds and shares of companies).

The authority of S&P and other credit rating agencies is much more important and influencing the financial market, whereas a normal publisher will not influence any markets when issuing new information (except in a few cases). Information from the rating agency must be disclosed so that nobody may use it before others can; which is called front-running which is an offence.
The time to market of the information of credit raters is much more sensitive, whereas the time-to-market and the moment of issue of a normal publisher is a matter of proper marketing.

Independence is key for the credit rating agency and not a serious topic for the normal publisher.

Sensation is what drives normal publishers to a certain extent; pure objectivity is what drives the rating agent.

Whether the information is coherent, logical and transparent is key for the credit agency (analytic integrity) this is less of an issue for the normal publisher.

Standard & Poor’s operates on the principles of

Independence, Objectivity, Analytic Integrity, and Disclosure
Standard & Poor’s traces its origins to the publication, in 1860, of Henry Varnum Poor’s History of Railroads and Canals in the United States, a precursor of modern stock reporting and analysis.
Since that time, Standard & Poor’s has continued to deliver on its mission to support “the investor’s right to know,” (source: standardandpoors.com).

On the website the history of S&P stops at 2005 and with an S&P index of around 1500 (now about 900). We see an index that is rising and rising over the decades. The simple index of 500 companies is one of the fundamentals of billions of dollars that move in the financial markets each minute.

A more in-debt question would be to focus on the nature of objectivity. How could that be determined?

A philosophical remark would be that independence is related to freedom, unattached and the opposite of imprisonment which both fall under the concept of power. How – philosophically speaking – can an agency that may influence the financial world be (free and) really independent and objective?

Jay

Davion Wong asked:




Your 3 in 1 credit reports with FICO score is a summary of your credit background

]]> http://free3creditreport.net/finance/3-in-1-credit-reports-with-fico-score-facts-about-your-fico-score-from-your-3-in-1-credit-report/feed/ 0 http://free3creditreport.net/finance/credit-rating-scores/ http://free3creditreport.net/finance/credit-rating-scores/#comments Wed, 16 Mar 2011 18:52:23 +0000 admin http://free3creditreport.net/finance/credit-rating-scores/

Jason Gluckman asked:




Credit rating scores are numbers produced by a mathematical formula according to the information contained in your credit report. This information is processed through special software and a score is arrived at. The score is used by financial institutions for evaluating an individual’s possible ability to pay back a debt.

Credit rating scores vary at different times depending on the changes or additions in your credit history. Every credit rating score is accompanied by a maximum of four reason codes. Reason codes indicate the reason why a consumer did not score high. There are various credit rating systems. Fair Isaac Credit Rating Score (FICO) is the most widely used system of credit scoring in the United States.

The scores depend on several factors including payment history, amounts owed, length of credit history, pattern of credit use, and types of credit in use. Factors that can damage your credit rating score include absence of credit references, late payments, and unfavorable credit card use.

Usually, credit rating score is a three digit number ranging between 375 and 900. The median score in the United States is about 720. Higher scores mean more financing options and better interest rates. Scores below certain numbers result in the rejection of credit. When you apply for a mortgage, home equity loan, car loan, line of credit, or business loan, the financial institutions first check your credit rating scores from the credit bureaus.

Credit rating scores significantly affect your ability to get credit. Borrowers now use the scores as a part of their general financial promotion strategy. Some insurance companies use your credit rating score to set your premium rates and some prospective employers use this to estimate your sense of responsibility.

Theodore

Terry Till asked:




In today’s world of financial credit it is of the utmost importance that you have a sound credit rating, or score, as this is the benchmark that all financial institutions use to determine whether they will advance you credit.

Now this form of credit may be for any number of purposes such as an automobile purchase, a mortgage on a home or even a family holiday, whatever it is that you are looking to gain credit for will involve a credit worthiness check and so you will see how vital a good credit score is necessary.

Obviously things taken into consideration by the financial institutions when arriving at this credit worthiness rating are previous loan repayment history and basically anything in your financial history that might give them doubts as to your possible worthiness to repay any credit given.

Obtaining a good credit history is usually something that is acquired automatically over your normal lifetime of using bank accounts and generally paying credit arrangements on time, however if at anytime you have been in the unfortunate position to have defaulted on credit repayments or even had to come to some arrangement on credit repayments by a forced legal action then this will obviously affect any future possible credit advancements.

One-way you can start to build, or rebuild your credit worthiness might be by obtaining a secured or pre-paid debit card. These can be used exactly the same way as a traditional credit card however you place cash advancements on the card first, which in effect becomes the limit on the card you are able to use. These cards are available fairly easily as there are no risks to the financial lenders and thus gives you all the advantages of a normal credit card without any possibility of placing yourself into a debt situation.

Over time using this means of payment while maintaining any other financial commitments you may have will regain your credit score and in time will lead to you being able to approach companies for a traditional credit card, should you wish, plus all other forms of credit arrangements.

Maureen

Jennifer Quilter asked:




The credit rating score scale is used by every company that takes a look at your finances, and yet most people don’t have any idea what the numbers mean. By learning the basic information you can be better prepared by knowing what to expect from companies when you apply for things.

Your score will matter on all sorts of applications. This information will not only be used to determine whether they will accept your application, but also to decide what rates will be offered to you. By having a better rating, you will save yourself money. This will matter when you apply for loans especially, but will also matter for renting a home or apartment, renting a car, insurance of any kind, and employers are often looking at this information now, making knowledge about the credit rating score scale all that much more important.

The number you receive is based on the information in your credit report. Each company you apply at with interpret your information individually, they will decide what they think a good score is, and how heavily they will weight other information on your application and anything from your credit report. If one company turns you down, it doesn’t mean you won’t have better luck elsewhere.

Though every company interprets the information individually, we can look at patterns and see how your score will generally be viewed.

The credit rating score scale ranges from 350 to 850, with individuals at either end extremely rare.

Anything below 500 is considered very bad and you’ll have a difficult time getting accepted for most things. You’ll want to really have a strong income and other things going for you to try and make yourself look better as an applicant. Really you should immediately be working on building up your score with secured credit cards and other credit building methods.

Those ranging from 500 to 600 are still in a very serious situation, and most of what I said above will apply to you as well. However, you may have an easier time as long as you have a good stable income.

People with credit ratings of 600-649 will hopefully be able to find acceptance at most places, but the interest rates will be very high.

You shouldn’t have much of a hard time finding companies to work with you if your score scales in the 650-679 range, and your interest rates won’t be the worst, but they won’t be great, either.

If you have a score of 680-720 you should be very happy! You will be able to do anything you want to, and while you typically won’t get the best interest rates available, they won’t be bad, either.

Anything over 730 is considered absolutely excellent! This is the dream goal for your finances, and will have a big effect on your overall life. Try and keep your finances simple and manageable to stay in this desirable range.

While everyone looks at the credit rating score scale differently, having this rough understanding of what all of this means will greatly help you reach all your financial goals.

Marvin

Kerry Hedden asked:




How Credit Card Companies Define the Different Credit Rating Levels of Applicants

With regard to credit scores, there are different categories in which individuals will fall. These include bad credit, fair credit, good credit and excellent credit ratings. The better the credit score of an individual, the more likely it is that the individual will not only receive favorable credit card offers but have their applications for those offers accepted as well. Credit card companies have category levels in which to group credit card applicants within and each company has their own special criteria which must be met in order for the individual to fall within a specific category. The following will provide a general summation of how the companies determine the category of an individual and what makes someone fall within the excellent credit rating category, for example.

How Credit Card Companies Determine Good to Excellent Credit Ratings

The most favorable category of borrower for the credit card companies is the individual who falls within the good to excellent credit rating. Of course, one who has perfect credit is highly desirable to a credit card company and will almost always be accepted for a credit card. In general, one who has a credit score of 650 or greater falls within the good to excellent category and many credit card companies will offer cards to these individuals. The main determining factor for credit card companies in the decision-making process related to issuing credit cards is the individual credit score. They also look at factors such as employment and annual income.

How Credit Card Companies Define Bad to Fair Credit Ratings

Perhaps the less desirable categories of credit ratings are the bad credit rating and fair credit rating. For these groups of individuals, obtaining a credit card will be more difficult to do as their credit scores may not be as high and therefore they will be declared by the company to be more of a lending risk. In general, those who have less than a 650 with regard to credit scores may fall within the fair to bad credit rating categories. Factors such as prior delinquency on payments and/or bankruptcy, may put the individual into a less desirable category as again, the risk is higher for the credit card company. Each credit card company will have their own determining factors when it comes to application acceptance and which individual falls into what category.

How to Determine Which Category You Fall Into

The best way to determine whether your current financial situation puts you in the bad, fair, good or excellent credit rating category is to choose a credit card company and then determine what their specifications consist of. This can be done by using the Internet to peruse their website or calling the company directly to see if they have certain requirements when it comes to financial categories of credit card applicants. It is also a good idea to know what your individual credit score may be as this will help to determine if you fall within the bad, fair, good or excellent credit rating category. Just keep in mind that every time you apply for a credit card, an inquiry will show up on your credit report and this could have a negative overall impact when you try to apply for credit cards and loans in the future. Therefore, do the necessary research first and then only apply for those cards which truly interest you.

Theodore