Continued ...... Credit Scoring

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How do I improve my credit score?
These common guidelines and practices will generally help raise your credit score:

Be Punctual Pay all of your bills on time.
Lateness, collections, and bankruptcies have the greatest negative impact on your credit score.

Check your credit report regularly and take the necessary steps to dispute inaccuracies.
Don't let your credit health suffer due to inaccurate information.

Watch your debt.
Keep your account balances below 75% of your available credit.
For instance, if you have a credit card with a $1,000 limit, you should try to keep the balance owed below $750.

Avoid "quick" credit fixes. A good credit score is created over time and reflects a number of interrelated factors.

Avoid excessive inquiries.
A large number of inquiries occurred over a short period of time may be interpreted as a sign that you are:
- Opening numerous credit accounts due to financial difficulties.
- Overextending yourself by taking on more debt than you can actually repay.

Consumer Credit Report Links

What is credit scoring?
Credit scoring is a method used by lenders to help decide whether or not you are a good candidate for a loan.

Lenders employ a credit scoring system to determine your credit score:
- Compares information in your credit report to the performance of consumers who have similar credit characteristics.
- Examines many credit characteristics including your payment history, the number and kind of accounts you have, the number and frequency of late payments, and any collections or bankruptcies.

Generally speaking, positive credit characteristics make your score higher and help you to qualify for better loans. Negative characteristics make your score lower and may interfere with your ability to qualify for the best loan terms.

How is a credit scoring model developed?
A lender creates a credit scoring model by using several criteria: - Selecting a large sampling of customers
- Analyzing the data in their credit reports to determine which factors relate to creditworthiness
- Assigning a degree of importance to each of the factors, based on how accurate a predictor it is in determining who will repay their loan on time.

Click here for a snapshot of your credit history!

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