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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