BestCreditRx, answers the question: What makes up your credit score?

  

 Email Article  

Tweet  

  

  

 delicious  

  

A person's credit score determines their ability to get credit for everything from purchasing a home to a new car loan to student loans and credit card approval.  Most consumers understand the importance of maintaining a strong credit score.  Simultaneously, many consumers are uncertain how credit reporting agencies determine their credit score. The agencies use complex mathematical algorithms and your credit score looks at the various factors that can affect an individual’s ability to handle loan and or credit payments to the lender. Credit scores put a number on how likely you are to pay your loan or default on the borrowed amount. 

Higher credit scores are more likely to maintain a positive payment history while lower credit scores are more likely to let payments be late and/or default entirely on the loan.

Credit scoring methods look at a weighted mathematical value to 5 key factors which have been proven to have the maximum potential of an individual’s ability to pay their debt off and maintain a strong and positive payment history. These are the most critical factors that the credit reporting agencies look at when determining your credit score:

• 35% Payment history
• 30% Debt to credit ratio.  How much debt you have outstanding vs. your total line of credit.
• 15% How old your accounts credit history is. 
• 10% Kind of credit accounts you hold.
• 10% The total amount and quality of inquiries against your credit report.

Now that you understand what makes up your score, how do you go about repairing your credit?

• Repair your credit yourself.  Takes a significant amount of research and letter writing.
• Consult and attorney or debt settlement specialist.  May eliminate some of your debts but not address your overall credit needs. 
• Find a credit repair company that provides an individualized prescription to the problem at hand. These companies are experts and professionals in repairing credit.  They do it hundreds of times per day and they have the resources and ability to get you the best credit results in the shortest period of time.

Get a Professional to give you the proper prescription to your credit issues.