Credit
Scores
One
of the questions that most people ask is about credit scores and how they affect
an individual's ability to get credit. Credit
score is a system through which the issuing company determines whether or
not credit can be given to a person and if yes, then at what rate.
A
credit score is arrived at by applying a statistical formula to your previous
credit history and that of others with similar history. This means your history
of paying bills, the duration, number and type of your existing or previous accounts
plays an important role in determining your credit score. Points are awarded for
each factor and the total number determines your credit score. A higher credit
score reflects that you are a good credit risk.
Three
national consumer reporting companies supply credit
scores on request but against a fee. Many other companies also offer such
services to sellers as well consumers against a price.
Accurate
"Bad" Information
Once
there is accurate negative information in your credit report there is no way that
you can get it removed other than waiting. Negative information continues to be
reported depending upon the type. Mildly negative information and unpaid judgment
stays for seven years, while bankruptcy is reported for ten years. Even where
the statute of limitation is applicable, the longer period is taken in account.
The reporting period runs from the date of the event. However, there is no time
limit in the following cases:
-
Criminal convictions.
- Information in response to application for a job
with a yearly salary of more that $ 75,000.
- Information in relation to an
application for a loan or insurance more than $ 150,000.
Some times the
situation unravels in a way that your good payment record does not reflect in
your credit profile. Although records of all national department store and all-purpose
bank credit cards appear in your file, there are certain cards issued by local
retailers, travel and gasoline cards and credit unions that are not included in
your file. In such cases you may be told that there is not sufficient credit file
or none at all.
In
such instances it is best to ask the consumer reporting companies to include these
cards in your file so that proper information is delivered in future reports.
This is not normal and many times such creditors do not report to the consumer
reporting companies but they will generally do it on request for a fee.
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