5 things You need to know about Credit

Knowledge is Power and Cash is king

FICO Scores range from 300 to 850; these scores come from a compilation of your 3 ratings from Equifax, Experian and Trans Union These companies, track and report your credit usage.

How they decide on this rating

1) 35% of credit is based on time and how promptly you pay your bills. How late? How often?

2) 30% of the credit score is based on the utilization of the credit that you already have. A) It is best to keep your balances under 50% of available credit, under 33% is better. So if the available balance on your credit card is 10,000 you would want to keep the total owed below 5,000 or less. B) Not more that 3-5 credit lines open at a time. This does not include your Home loan or your Car loan. C) This is the easiest area to improve.

3) 15% of the credit score is based on your long term payment history. A) Lenders can look back as far as 30 years to see how often you transferred balances. So if you switch credit cards often to get the deals it can look bad B) How active and how long the accounts have been open determine the stability of your credit.

4) 10% of the credit score is based on what TYPE of credit you have. A ) Installment - "Car Loans - stable payment " B ) Revolving -" Credit Card _ payment can change, as you use the card" C) Finance Company (BAD) these could be for anything, household items etc.. Normally the purchase of item/s. Example Say you bought $1200.00 worth of Furnature, the loan would be for $1200, so the upper limit would be $1200 and you would be at max amount on the loan, where you should be at 50% or less. D) Know the TYPE of Credit you have.

5) 10% of your score comes from the number of inquires made by you and others to check your credit. A) Soft inquires = you or your existing creditors pull your credit report. B) Hard inquires = occur when you are applying for new credit, even if you do not obtain credit from that merchant. ***** Charge cards, Bank loans, Finance Companies, Insurance inquires will all count against you

You are entitled to one free credit report a year from each of the reporting agencies.

1) Equifax - www.equifax.com 1-888-685-111

2) Experian - www.experian.com 1-888-397-3742

3) Trans- Union www.transunion.com 1-800-888-4213

Or do all 3 here
https://www.annualcreditreport.com/cra/index.jsp

You can also use this link to print out the form to mail, along with a copy of your driver’s lic and SS card
https://fact.econsumer.equifax.com/equicom/prod/images/uib/images/MailInDislcosureRequest.pdf