Get Free Credit Score – FICO Report

Stephanie Andrews asked:




Your FICO score is a term used to measure your overall credit worthiness. It is based on the information provided in your credit report. The report, in turn, reveals information about your past and present payment patterns. It also lists details regarding your credit history and the different forms of credit you currently have.

In today’s world, you’ll find that your credit report and your credit score can make a big difference. Some employers will want to check your credit rating before hiring you. Certain car dealers will look at your FICO score before granting you a loan. Insurance companies, banks, and even landlords may also be interested in your credit standing.

An Inside Look at your Credit Report

Now that you understand the importance of having a good credit report, let’s break down the information that goes into one. First of all, a credit report reflects the current bills and loans that you have. It also shows whether or not you make payments on a timely basis. If a bank sees that you have a history of paying your bills on time, it will be much more likely to grant you a loan. Creditors use the payments you’ve made in the past as an indicator of how well you’ll make timely payments in the future.

Your credit report will reflect the type of credit that you carry. It will list details regarding the credit cards you own, the types of car and home loans you have, and any other outstanding or unpaid balances you may carry. It also includes any debt you might have with banks, utility companies, telephone companies, hospitals, or any other organization.

The facts found on your credit report are the basis for your credit score. The various numbers are plugged into a complex formula in a computer-based used to generate the final score. The end result is a three-digit number. It ranges between 300 and 800; the higher the number, the better the score.

Your FICO Score

FICO stands for Fair Isaac Corporation, the company that developed the most widely used model to calculate a credit score. Only the information in your credit report is considered for your FICO score. The system uses both positive and negative information regarding your credit when calculating a final score.

Here are a few key points to remember for managing your score:

- Your history of making payments on time has a large impact on your final score. If you’ve missed credit card payments, mortgage payments, or are behind on certain loans, it will show up on your score. That said, an overall solid credit history may outweigh a few late payments.

- Owing money isn’t a bad thing, but owing too much of it can affect your score. The amount of debt you carry, compared to how much income you earn, is taken into account. The lower this ratio is, the better your score will be.

- Generally speaking, your FICO score increases with a longer credit history. Creditors want to know how efficiently and responsibly you manage your available credit over time.

- For those without a long credit history, opening several credit accounts in a short span of time is often viewed negatively by creditors. Before opening a new account, make sure that it is a wise financial decision for your situation.

Spotting Fraud and Finding Errors

Although you can’t view the exact formula that calculates your credit score, you can look at your credit report to check for any errors. In fact, it is a good idea to check your credit report occasionally for any mistakes or unauthorized activity. If you find an error or do not agree with a certain aspect of it, the Fair Credit Reporting Act gives you the right to dispute the matter. Be sure to report anything out of the ordinary to the appropriate credit bureaus.

If you spot inaccurate information, you can notify a CRA, or Consumer Reporting Agency. Send the agency a letter about the problem, and include copies of any documents relating to the case. In your letter, clearly identify each disputed item. State the facts, explain the disputed information, and request either a correction or deletion. The credit-reporting agency will look into the matter and either verify the item in question or remove it from your report.

There may be items on your report that need further explanation, such as late payments due to job loss, unexpected medical bills, or military call-up. If this is the case, send a brief statement to the credit-reporting agency, and your credit profile will be updated with the relevant information.

If you are not able to clear up the matter right away, ask the CRA to include a statement of the dispute in your file and in any reports in the future. Secondly, in addition to writing to the CRA, inform the creditor or other source of information about the dispute status. If you detect any fraudulent activities in your free credit report, contact the Federal Trade Commission at its hotline: 1-877-ID-THEFT (438-4338).

Credit Improvement and Protection

Once you have a solid understanding of credit scoring, you’re ready to work on establishing and maintaining good credit. By taking the right steps and being responsible, you can enhance your credit score over time. Here are a few guidelines to help you get your credit back in shape:
Handle your bank account responsibly and don’t let your checks bounce. Pay all your utility bills on time, and close the accounts when you change locations. Keep a credit card and use it responsibly. Make sure the card is paid on time (at least the minimum amount payable). Keep credit card balances low. Check your credit report for accuracy. Don’t open multiple accounts frequently if you have a short credit history. Don’t close an account in order to remove it from your record. Shop for a loan within a focused period of time. Contact your creditors or a legitimate credit counselor when you go through financial difficulties.

To establish a good credit score, it is essential that you show creditors that you are financially responsible. In doing so, you’ll not only raise your score, but you’ll also be able to secure higher credit limits, better interest rates, and more types of credit.

Alicia

C R Ellsworth asked:




FICO Credit Scoring is a method developed by Fair Isaac & Co. to evaluate your ‘credit worthiness’.

There are really three FICO scores computed to find my FICO Score. They are found by data provided by each of the three bureaus – Experian, Trans Union and Equifax. Some lenders use one of these three scores, while other lenders may use the middle score.

While the most widely-known score in the United States is FICO (which is most widely used in the mortgage industry), there are many others, such as NextGen and Vantage Score.

A credit score attempts to judge the likelihood that a prospective borrower will fail to repay a loan or other credit commitment over a specified period of time. Credit scores are based on the information in an individual’s credit report. Lenders use credit scores to evaluate the potential risk posed by lending money to consumers in an attempt to limit business losses related to risk.

Some of these uses include determining who qualifies for a loan, assigning an interest rate, assigning credit limits, and managing accounts that are already open (for example, treatment of accounts that are in default).

The FICO scores are designed to indicate the likelihood that a borrower will be delinquent within the next 24 months. No public information is available to determine what the scores mean in terms of statistics. A separate score, BNI, is used to indicate likelihood of bankruptcy.

If your FICO Credit Score is marginally low, or definitely low, you should consider credit repair before you apply for any new credit, whether that would be a home Equity Line, Auto Purchase or Student Loan. Credit card debt consolidation under your own motivation is probably the most effective repair. Other credit consolidation beside credit card consolidation may be in order, but if your FICO Credit Score is lower than desired Credit Cards are the most likely point to attack first.

The three major credit reporting agencies (also often, but inaccurately referred to as credit bureaus) in the United States, (Equifax, Experian and TransUnion) calculate their own credit scores. These versions, while all developed for the agencies by Fair Isaac, differ and are periodically updated to reflect current consumer repayment behavior. The NextGen Scores are the most recent scores, but creditors vary in which version they prefer to use.

Each of the credit reporting agencies has developed its own version of the credit score intended to compete with Fair Isaac’s score. Although not as widely used, these scores (for example Trans Union’s “TransRisk” score or Experian’s “ScoreX” score) are less expensive than the FICO score. These scores are often derisively referred to by consumers and lenders as “FAKO” scores, for they do not use official Fair Isaac methodologies.

Fair Isaac offers scoring models for the U.S., Canada, and South Africa. It also offers a “Global FICO” for many other countries.

Although the exact formula for calculating credit scores are closely guarded secrets, Fair Isaac has disclosed the following components and the approximate weighted contribution of each:

35% punctuality of payment in the past (only includes payments later than 30 days past due) 30% capacity used: the ratio of current revolving debt (credit card balances, etc.) to total available revolving credit (credit limits) 15% length of credit history 10% types of credit used (installment, revolving, consumer finance) 10% recent search for credit and/or amount of credit obtained recently

Vincent

Kristy Annely asked:




Earlier, having bad credit was the greatest detriment to getting a mortgage approved. However, today there are a vast number of companies who specialize in providing mortgages to people with bad credit. Even a large number of mainstream companies (read: highly reputable companies) are joining the fray. Mortgages to people with a bad credit history are today considered to be big business.

Bad credit mortgage companies, also called sub-prime mortgage companies, rely on FICO scores to determine the creditworthiness of a person. These scores are available with agencies such as Equifax, Experian and Trans Union Corporation. A FICO credit score of less than 620 is generally considered bad credit. Though mortgage companies today do not shirk from giving loans to bad credit people, they do not typically provide any mortgages to people below FICO scores of 500.

The bad news is that many mortgage companies do not hesitate in taking advantage of the precarious situation their bad credit history clients are in. This is shown by the way they charge higher rates of interest than people with good credit. This means more business in the bad credit mortgage market. In addition, people with bad credit need to make a down payment (typically at least 20%) to prove their earnestness to the purpose of taking the mortgage. This is good to the borrowers, as it makes repayment easier. Bad credit borrowers are also obliged to pay mortgage insurance- only that the rates of interest may be marginally higher.

Yet today, with new laws being passed, the distinction between people with good and bad credit is blurring. Mortgage companies are charging lower rates of interest than before. With the advent of the new economic term ‘non-status’, which includes those self-employed people who cannot prove their accountability, several people have been subtracted from the bad credit category. The interest rates for non-status people are almost the same as that of people with good credit.

Companies specializing in bad credit mortgages are extensively advertising on channels such as the internet. They invite people to get pre-qualified and fill online application forms. Such companies are doing a great business in the market of bad credit mortgages.

However, people with bad credit must be wary of companies that are looking to fleece them. Some unscrupulous companies may create a psychological fear in the minds of their clients that they would not get loans elsewhere, so they can ensnare them for higher rates of interest. It is always advisable to shop around to hunt for the best bad credit mortgage company in the market.

Jimmy

MrPissedConsumer asked:

Don’t want to be human? Show compassion to people or they will return the favor many times over. You creditors may feel that you have all the power in the world, but if it were not for the American Tax Payer and the government making the decision for us, like it or not, you would have crashed and burned a long time ago. You get bail outs and then you turn around and rape the tax payers that saved your ass? I have no problem just walking away and sitting back for the next 7 years for my credit to clear-up. You take our money after all your commission driven scabs give people credit that shouldn’t have had it in the first place and then nail those who paid and over paid to keep perfect credit because you will never collect from those who never intended to pay anyhow. Well, if you would have left me out of this mess that you created you would have been paid. Now, your ceo’s can foot the bill for me. I live by cash now!

Edward

Divya Mishra asked:




Do you know that the information in your credit report is open to a lot of subjective interpretation? For example, if the unsecured lender sees that you do make repayments but you make it on a very irregular basis, he or she may conclude that you are not a disciplined individual and that you should be charged high interest rates.

As far as you are concerned, you might have been relaxed because you have, at the end of the day, repaid the debt. However, what is going to stop the lender from opting for the former interpretation and rejecting your approach? Nothing. If the lenders decide to go in for such an interpretation, you can be rest assured that you will end up with high interest debt against your name.

This is where credit repair specialists enter the picture. Not only will they help you overcome the damage caused by the previous mistakes, it will also help you avoid the mistakes in the future.

It is not very difficult to improve your FICO score if you know what you are doing. If you simply adopt a casual and lackadaisical attitude towards your finances and expect everything to get sorted out on its own, then you have got it completely wrong. Each and every cent that you repay should be deposited only after you understand its impact. Do you know that repaying a debt that has not been kept up to date for the past six months will actually result in a reduction in your credit score?

Do you know that you will have to consider the charge of factor and check whether the debt is still owed to the lender or to the debt collection agent? You can find answers to all these questions with the help of a credit repair specialist. The specialist will advise you to repay your existing credit card debt instead of adopting a chronological repayment schedule.

These are small points but the cumulative effect of all these points will be that your credit report shows a drastic increase very quickly. Do not believe the tall claims made by individuals of increasing your credit score by two hundred in a month or two. However, do not completely skip it all together.

Adopt a skeptical approach and go in for the services. If you succeed, you won’t be complaining, will you? This is the right attitude to take. This will help you avoid being cheated and yet will put you in a position to enjoy maximum benefits.

Joel

Tim Gorman asked:




Your FICO score or credit score as it’s commonly called is a very important calculation that can control whether or not you are eligible to receive credit and if eligible the terms you can receive credit under. Failure to understand the impact this score can have on you future purchasing power and lifestyle can be disastrous. This article will break down all the information you need to know regarding your FICO score.

As I mentioned above the FICO score is a numerical score that is based on your financial history as collected in your credit report. Creditors can use this number to evaluate whether or not you are able to pay a loan back on time. The higher the score the more likely you are to pay off a loan on time and the less of a credit risk you pose.

The FICO or credit score ranges are broken down as follows:

720-850 – This represent the best score range

700-719 – Able to obtain favorable financing terms

675-699- This is still a decent score range

620-674 – May have trouble obtaining favorable credit terms

560-619 – May have trouble obtaining credit

500-559 – Time to improve your score

Your credit score is broken down into 5 distinct categories each with their own importance based on a percentile. The 5 categories and the percentage they represent I relation to your credit score are as follows:

Payment History – 35%

Amounts Owed – 30%

Length of Credit History – 15%

New Credit – 10%

Types of Credit Used – 10%

Your payment history contains information on credit cards, retail accounts, installment loans, finance company accounts and any mortgages you may have had. It also details any past due accounts and the amount owed on hem. You will also find bankruptcy information as well as other adverse information in regards to your credit history. This is why it warrants a 35% piece of the pie.

Your amount owed is generally speaking the amount owed on any accounts you currently have and number of accounts with balances. Note that it has a large impact (30%) on your credit score. The length of your credit history details when accounts were opened and the last activity on those accounts. New credit shows the number of recently opened accounts by the type of account and number of account inquiries. Finally the type of credit used is a snapshot of what types of financing you have held.

Other information that is included in your credit report but has no bearing on your FICO score includes your race, age, where you live and your sex and employment information. Although the FICO score doesn’t use these factors the employment information may be used by other companies and creditors to help in their decision making process.

There are three major credit-reporting agencies – Equifax, Experian and TransUnion that have your credit information on hand. Each of these credit bureaus maintains their information separately, which can cause the financial data to be slightly different among the three of them. Most experts agree that in order to get the best snapshot of your financial history and credit worthiness it is a good idea to request a report from each of the reporting agencies. It is also highly recommended that you actually review your credit report once a year in order to identify and correct any errors before they cause any future potential problems when you apply for credit. Recent changes in the laws no allow for consumers to request 1 free credit report each year in order to look for any such errors.

Here is the contact information for each of the three reporting credit bureaus:

Equifax: (800) 685-1111, http://www.equifax.com

Experian: (888) 397-3742, http://www.experian.com

TransUnion: (800) 888-4213, http://www.transunion.com

As you can see your FICO Score is a very important number that represents your financial trustworthiness in the eyes of creditors. Failure to properly monitor it could cause you future headaches when it comes time to apply for any form of credit.

Dawn

Zach Ford asked:




When you apply for a mortgage, car lease, or almost any other type of loan, lenders will use your FICO credit score to help them determine whether or not you are an acceptable candidate. It is always an excellent idea to check your credit score and credit report if you expect you will be applying for a loan in the near future. This will give you the opportunity to address any errors or out-of-date information which may be present on your report, as well as give you time to improve your FICO credit score, should you find that improvement is necessary.

The FICO credit rating system works by running all of your previous and present financial activities through a complex formula, resulting in a numerical score, usually between 300 and 850. The higher your score, the more likely you are to receive a quality loan.

People with FICO scores lower than 650-600 are usually thought of, by lenders, as higher risk clients. This results in less available lenders and higher interest rates. Having a low FICO score can be extremely frustrating and even downright embarrassing. So how can someone with a less than perfect FICO credit score improve their credit? Read on to find out more!

The most important way to raise your FICO score, and keep it high, is to pay your bills on time! This is, by far, the most important factor when it comes to your credit score. Nobody is perfect, so if you ever are unable to make a payment on time, be sure to contact the appropriated creditor as soon as you can to figure out a way to avoid harming your FICO score. Lenders want to keep your business loyalty, so they may even end up offering you a lower interest rate.

Avoid opening up excessive credit accounts unless they are absolutely necessary. Having a few credit cards is desirable, but having too many can actually hurt your credit score. Lenders hold long term accounts, that you have made consistent on time payments to, much higher than new accounts, which you have little history with.

Ashley

Daniel Walton asked:




A FICO score is a branded version of your credit score named after Fair Isaac Corporation. FICO scores are essential to every American consumers since they are widely used by largest banks and are popular among creditors when making loan approval decisions.

You may often hear the terms credit report and credit score interchanged even though there’s a significant difference between these two. A credit report is a detailed history of one’s credit information while a credit score is a three-digit number calculated based on the details contained in your credit report. The higher the score the better.

There are three major credit reporting bureaus that keep track of your accounts, both past and existing financial accounts.

Computing your FICO score is based on percentages. The reporting bureaus use the following breakdown when computing a score within the range of 300 to 800:

Payment history- 35%

Total amount of debt- 30%

The length of time you have been a borrower- 15%

The amount of new credit you have accumulated- 10%

The type of credit you mainly use- 10%

The breakdown simply shows that how you pay your bills is a significant part of computing your FICO score. This explains why delaying or defaulting on your payments can negatively impact your score.

Never underestimate the importance of your credit score in your personal finance. Check your credit report regularly. It is advisable to keep track of your scores once every quarter to avoid cases of identity theft and other fraudulent activities.

Pamela

Zach Ford asked:




A big part of the financial aspect of your life is to know your FICO score. This rating is essential, especially when you want to be accepted for loans and mortgages. There are lots of things that maybe a factor in the deterrence of your FICO score, like errors out of your hands, or other outdated information, with these kinds of possibilities out there, you should keep track of your credit information all the time.

Your past really matters when it comes to the computation of your FICO score, because the way you pay your bills before, the number of credit cards you have acquired, and the way you manage your debts counts. The better management given to your past and current debts will give you a better financial reputation which make you more reputable.

Generally, FICO scores range between 300 and 850, with 850 representing the best possible score, and 350 signifying the worst possible bad credit rating The average American has a score of around 720-740, which is seen as a satisfactory rating and will be rewarded with lower interest rates and better terms.

You should know where you belong in the range to determine how much loan can you get and how much interest is possible for you. The more educated you get about your money, the better you can manage your money.Do not let your credit go down, because if you do it would be hard to put it up. Better track your finances to have a high FICO score. Always remember a high score means that you are a credible loaner.

Wilma