Your Credit Scores Real Deal

By Author: Ray Shak
Total Articles: 26
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Our credit history can make a big mark on how worthy we are when it comes to borrowing money. It's like giving people an idea on how we pay our debts. Whether we are a good or bad payer, this can be seen in our credit history. But as years passed the credit history has been over rated and the real deal with credit reports has not been seen.

What do I mean about that? It's your Credit Score. The credit score ranges from 300 to 850, of course the higher the credit score is the better. Fair Isaac takes information from your credit report, then analyze the different pieces of information from your credit report and how long ago those things occurred. Then, Fair Issac comes up with a number for you. This score is one vital factor on the lender's decision whether to give you're a mortgage or not.

Another question to take into account is, Do most lenders use these scores?

The answer is yes. As survey says that 70% use these FISCO (Fair Isaac and Co) scores. Thus, this means that it plays a vital role in our credit scores

How do most people do?

Let's take into consideration ...
... the bankruptcies that are happening, From the scale given 300 to 850, the average score is about 720. Below that, you might encounter problems on getting the trust of lenders. Though 20% of people have a credit score lower than 720, it doesn't mean that they can't convince lenders to lend some money. However, Fannie Mae and Freddie Mac advices lenders to get more information from the borrowers to further understand the sources of problems before they lend money. On the other side, if you got a credit score higher than 780, they you are considered elite. In addition to that information, only one to two percent of consumers' credit scores are in 800.

Now, let's talk about the factors that will make a big impact in your credit score.

About 35% of your score will go to your bill-paying record. If you pay your bills in time, then you definitely get a perfect 35%. However, if you fail on this part, this might hurt your credit score. Remember, one mistake, no matter how small or big it may seem, can make a big chaos. Put it this way, 30 consecutive days of late payments is worse than one sixty day late. These patters are used by most lenders to know your credibility in paying bills.

Now, let's discuss, how much do you owe? This is 30% into consideration; it is relative to how much money or credit you have on your credit cards. The closer you are in maxing out your credit card, the lower score you'll get for this.

How long you've managed credit? This is 15% when taken into consideration and one of the most interesting parts. This is what we usually advice people to do. Instead of having loads of credit cards in your wallet, why not cut off the other and maintain the credit card holding the best and oldest record.

Next is, Mix of credit, 10% of the total score. The fact that you can manage well all different kinds of credits is a good point. Next is the Pursuit of new credit, also get the 10% of the totality. Other media might say that this can hurt you but if you'll think about it, that's the concept many years ago but now, having different kind of credit is okay. Indeed, it is now considered as a smart move. The main key here is Moderation and management and you'll see everything will turn out perfectly.

With all of this information at your hand, you'll surely have a guide on your credit scores. When you talk to your lenders, you can use your credit scores information. At least, you will not act like a beginner in this situation, because you will have the knowledge of how all of this works. Apparently, you can also work on your credit scores before applying for credit. Give yourself a maximum of 6 months before doing so. Just be wise all the time and use all the information you get because it will always be vital in the end.

If you have more questions and want more information on improving credit score., please visit this site