How To Calculate Your Credit Score
If you’re interested in credit report repair or a credit report dispute, it’s important to understand how credit reporting agencies work.
The credit reporting agencies do not actually make your credit score or keep any real record of it. Likewise, they cannot change it. Credit scoring occurs when your credit report is put into a calculation that creates a unique credit score. As any information changes on your credit report, so does your score. The credit score is supposed to distill all the information in your credit report, using a formula to calculate a single number that indicates your creditworthiness. The most widely known credit scoring model is the FICO score, a credit score calculation based upon the model developed by the California company called Fair Isaac Corporation. It’s designed to give lenders an idea of what kind of risk you are to give you credit or a loan.
SmithMarco, P.C., is a trustworthy resource for people who have concerns about their credit scores. We are a team of experienced credit repair lawyers who can alert you about what to watch for or help you repair your credit score in a deliberate, effective way.
What Are The Things That Affect Your Credit Score The Most?
These are red flags for credit reporting bureaus. Let us know if you have seen any of these on your credit report:
- Past delinquency: Any missed payments on an account. The more recent the missed payment, the more it will hurt your credit score.
- High amounts listed in the average daily balance and amount of credit used: If you are maxed out or close to the limit on a credit card, or you typically leave high balances on your credit cards or lines of credit, you would be considered a greater risk than someone who doesn’t look at the high credit line as a license to print money.
- Relatively new credit cards in your credit file: Fair Isaac’s model assumes people who have had credit for a long time are less risky.
- A high number of times you have asked for credit: The more inquiries you have on your credit report, the more it can hurt you when you’re seeking credit report repair. If it appears you have been asking for a lot of credit lately, it seems like you are becoming a bigger and bigger risk with the more credit you try to take on.
- A risk-laden portfolio of credit: Someone with only a secured credit card is generally riskier than someone who has a combination of installment and revolving loans. (On installment loans, a person borrows money once and makes fixed payments until the balance is gone while revolving borrowers make regular payments, each of which frees up more money to access.)
Know the weaknesses of your credit report and learn how to strengthen it.
Consult With A Credit Counseling Lawyer At SmithMarco, P.C.
We have helped many clients turn things around when they had fixable credit problems. Let us discover with you how you can do the same.