A credit score is a number generated by a mathematical formula that is meant to predict credit worthiness. The most common of the credit score standards is the FICO score by Fair Isaac.
The FICO score ranges from 350-850 and is intended as a predictor of whether or not you will be 90 days late on a loan obligation. Fair Isaac uses thousands of credit reports to calibrate the FICO scoring model and is very secretive of the exact formula. The average FICO score in the United States usually hovers around 700, and the best loan programs are available to people with FICO scores over 720.
The chart below is what Fair Isaac makes public about the credit scoring formula. |
The first step toward owning a home is to secure financing. To do so, you will need to provide your credit report to the lender(s). Use the reources below to get a free copy of your credit report so that you can correct any errors before applying for a loan. By law, all consumers are entitled to a free copy of their credit report from each of the three credit bureaus once a year. Visit www.AnnualCreditReport.com to get yours for FREE. (This is for the credit report only and does not include the credit scroe.) You may also visit www.MyFICO.com and order the same credit score a mortgage company uses for approvals. A requestsfor one’s own FICO score at www.MyFICO.com is considered a personal inquiry and will not hurt the credit score. Have you considered Credit Repair? Most people try to keep good credit, but sometimes the unforeseen can happen. If you have been turned down for mortgage or believe that your credit score is too low to be approved for a loan, please consider a credit repair service. Everyone deserves a second chance and the right credit repair service can raise your credit score an average of 60 to 100 points.
Why You Need a Higher Credit Score
Your credit score is the most important three-digit number in your life. Raising your credit score can lead to savings of hundreds of thousands of dollars over the life of a mortgage. In addition, a higher credit score can help you with credit card rates, auto loans, and help you get that job you wanted.
How Credit Repair Works
Credit repair works by employing credit experts who raise your credit score by working with the major credit bureaus and your creditors to remove negative items from your credit report. On average, a good credit repair service is able to remove 70 percent of negative items from your credit report thereby increasing your score.
Credit repair companies work to remove and update any inaccurate information from your credit report in order to maximize your true credit score. A reputable company will provide you with sound credit advice and help you understand the basics of credit so that you are able to make more informed decisions in the future.
Does a poor credit score really hurt me?
Yes, and in numerous ways. Most people know that a poor credit score leads to higher interest rates for credit cards, auto loans and home mortgages, but did you know that a poor FICO score can affect your insurance rates? The credit score has become a barometer by which many people are judged. Many employers will even research your FICO score when you seek a job.
How can credit consulting help my score?
When you hire a credit repair service, they will work on removing negative items from your credit history. They will also show you how to lower your debt ratio, even if paying off credit cards is not an option. They can also work on removing items such as credit inquiries from your credit report.
Most people are aware of the three credit reporting agencies TransUnion, Equifax and Experian. The average difference in score between the highest and lowest of your three FICO scores is 60 points. This is the result of each of the credit bureaus having different items on their report, some correct, some incorrect and some that are not being reported in full compliance with credit law.
According to the Government Accountability Office, 80-90 percent of credit reports have serious errors on them, and this does not even include the more minute errors that a reputable credit repair company will look for.
How Credit Consulting Works
Credit repair services work to raise your credit score by removing negative items from your credit report while giving you sound advice on what you can do to raise your score on your own. A reputable company will average a 60-100 point FICO score increase in three to six months. Substantial results usually start in as little as 35 days.
Is credit repair real
Contrary to what the credit bureaus would like you to believe, credit repair does work and can work for 100% of people in most circumstances. This is, of course, provided you are getting the best advice and have an experienced professional working on your case. Anyone with a credit score below 720 can benefit long-term from the advice and information provided through credit repair; however, there are times when your own limitations make adhering to this advice impossible. The two limiting factors are: (1) your financial situation and (2) the time frame in which you need to reach your results. It is possible to remove anything from a credit report, even accurate items, if the creditor does not adhere to the law that outlines what needs to be done and by when.
Will the removed items come back?
No, as long as the item is current or paid at the time of removal or the collection is older than three years. This holds true except in very rare circumstances.
What items can be removed?
Bankruptcies, foreclosures, collections, charge-offs, repossessions, medical bills, credit card debt, inquiries, late payments, old addresses, judgments, tax liens, student loans and identity theft.
What items cannot be removed?
None.
How long does it take to increase a credit score?
The amount of time needed is different in every circumstance, usually varying between two to six months to remove up to 100 percent of negative items from a credit report. On average, 65 to 70 percent of negative items can be removed with a subsequent FICO score increase of 60-100 points.
The Arizona Lifestyle Team works closely with credit repair services. If you would like to be contacted by a Credit Repair Expert for a Free Consultation, please provide your contact information below:
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