CREDIT SCORES SECRETS
- Credit score is the likely hood of the customer
ability to repay a debt. It shows the likely
hood of a customer getting a 90-day late in
the next 24 months.
- There are 10 score cards at each bureau score
ranges from 300 – 850 (range)
- Foreclosure is the same as a 90-day late
as for as the credit scoring goes.
- Every 2 years adjustment is done for all
3 bureaus.
- Fico 1 and Fico 2 can differ up to 100 points.
- Collection, whether paid or unpaid, is the
sane as far as the score is concerned. (Paying
the collection will not increase the score)
Example: 1997 collection unpaid is paid in 2002
will bring scores down because the system will
identify the payment date not the original date.
It’s best to pay before it reaches collection.
(If the collection is paid, get the agency to
submit a letter to the bureau to get account
taken off to help raise score.
CREDIT SCORE RATIO
BREAKDOWN
35% Payment
history.... lates, collections, etc
30% Balances
| a.
If balances are over 50% scores hit hard and
scores go down. |
| b.
If balances are over 75% of credit limit,
score problem red flag. |
15% Credit
history-age of old and new credit accounts…number
of credit card accounts divided by years
Example: 1 card at 24 months, 2 cards at 36 months,
3 cards at 60 months/ 3 cards at 120 months=each
card average 40 months.
10% Type
of credit card: mixture of credit accounts whether
installment or revolving account. Financial company’s
installments are not good. Secure credit is good.
10% Inquiry:
Counted for 1-year…auto and mortgage industry
gives a 30-day buffer. Both inquiries are grouped
together to count as one if in a two-week gap.
Example: If a report is pulled on July 10 to August
10 and they are Auto or Mortgage they count as
one.
*Factor Code in order of
significant
038 – Serious delinquency
034 – Amount owed on delinquency account
020 – Length of time since derogatory public
record or collection
This information sheet was meant to tell you
what would bring your credit scores down and why.
This will help educate you on some of the ways
that the credit system works. Our society is built
on credit. The more
credit you have the more powerful you are.
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