Credit Score
Credit scores are designed to measure the risk of default by taking into account various factors in a person's financial history. Although the exact formulas for calculating credit scores are secret, FICO has disclosed the following components: (FICO is an acronym for Fair Isaac Corporation)

The Makeup of a FICO score

35% — Payment history – Late payments on bills, such as a mortgage, credit card or automobile loan, can cause a FICO score to drop. Paying bills on time will improve your FICO score.

30% — Credit utilization – The ratio of current debt (such as credit card balances) to the total available credit i.e. credit limit. You can improve your FICO scores by paying off debt and or lowering the balance to below 30%. Alternatively, applying for and receiving an increase in credit limit will also drive down the utilization ratio. The closing of existing revolving accounts will typically adversely affect this ratio and therefore have a negative impact on a FICO score. Although in some cases may improve your FICO score in the long run.

15% — Length of credit history – As your credit history ages it can have a positive impact on the FICO score. If you are going to close out credit cards, close out the newest cards and keep the cards you have had the longest.

10% — Types of credit used – You can benefit by having a history of managing different types of credit; such as a mortgage loan, installment loan, a few revolving lines of credit (credit cards).

10% — Recent search for credit – Credit inquiries, which occur when you are seeking new credit, can hurt your score. Individuals shopping for a mortgage or auto loan over a short period of time will likely not experience a decrease in their scores as a result of these types of inquiries.

However, while all credit inquiries are recorded and displayed on your credit report for a period of time, credit inquiries that were made by yourself (to check your credit), by your employer (for employee verification) or by companies initiating pre-screened offers of credit or insurance do not have any impact on your credit score.

There are other special factors which can weigh on the FICO score. Any money owed because of a court judgment, tax lien, etc. carry an additional negative penalty, especially when recent. Having one or more newly opened credit accounts may also be a negative.

FICO Score Range 300 to 850, 300 is bad 850 is awesome, median score reported to be 723.

Each individual actually has three credit scores for the FICO scoring model because there are three national credit bureaus, Experian, Equifax and TransUnion, each has its own database. Data about an individual consumer can vary from bureau to bureau consequently Lenders may take the average of the three or middle score as your FICO rating. It is possible to improve your FICO score in a relatively short period of time and Cherry Creek Mortgage can help you achieve this by running a what if simulator. This simulator adjust aspects of your credit profile like credit card balances etc and then reports back what changes will give you the highest and best results.

You can go directly to any of the Credit Bureaus linked above and retrieve your FICO score. Make sure you ask for the credit report that provides the Fair Isaac Corporation (FICO) and not the credit bureaus equivalent score or personal score. You should also make sure you get all three scores, one from each agency. Experian can provide you all three scores but becareful that you are not signing up for on going credit monitoring, unless you want the service. 

Just say "NO" to Credit Repair Companies Credit repair companies make phenomenal claims as to how they can help consumers "repair" their credit; however all they really do is dispute items on a report the same as you can do for yourself. Visit Annual Credit Report through this site you can retrieve credit information and dispute, on your own, any errors you find... FOR FREE...

CLICK HERE FOR: Answers to Frequently Asked Questions and More Information on Credit.
Website Builder