Upping Your Credit Ratings Via Credit Repair

If you want to repair your credit you will need to be aware of credit scores

. A credit score is a number representing the creditworthiness of a person based upon the likelihood that this person will pay his / her debts. It is based upon a statistical and mathematical analysis of many factors including the records contained on a credit report, both negative and positive information, the amount of credit available vs. the amount of credit used and open accounts. Increasing your credit rating is crucial to credit repair.

In 1958 the Fair Isaac Corporation, a publicly traded company you will find under the symbol FIC, created the first credit scoring system. This later became known by the acronym FICO, or FICO score. Later in 1970 the Fair Isaac Corporation created the first credit scoring system for a bank credit card. You'll find additional companies that do credit scoring but none are as common as the FICO score. Improving your FICO score will assist in improving your credit rating.

A FICO score will only take into consideration fair and objective measures such as late payments, financial concerns from the past and your current level of debt. Race, gender and ethnicity are not considered and this is one reason why the FICO score is regarded as one of the best fore-tellers of creditworthiness. Taking measures to repair your credit and remove false or misleading information from your credit report can increase your FICO score.

Improving your credit rating and raising your credit score will definitely increase your chances of getting credit. A low credit score may cause a lender to require you to provide more collateral or they may even require a more thorough asset and income verification. Many lenders use the FICO score to refuse or issue credit and to determine how high the interest rate will be.

If you wish to repair your credit rating it is important to verify the current score from each of the three major credit reporting agencies, Equifax, Experian and TransUnion. The scores from each of the three companies will differ according to the various statistical methods they use, the data used and how everything is weighted. Many lenders will take an average of the three or just pick one depending upon their own in-house regulations.

Make sure that you are not overextending and using too much of your available credit so that your expenses are in line and ensure that your debts are paid on a regular schedule. A major factor in credit scoring is a correlation between available credit and credit used. If you wish to increase your credit score consider getting approved for a higher limit on your credit yet don't use much of it.

Other factors to acknowledge when you are repairing your credit and improving your credit scores are the duration of your credit history, your credit cards, any outstanding balances and credit applications. Do not apply for credit unless it is absolutely necessary as each inquiry on your credit report counts against you on your credit rating and FICO scores. At the same time, do not cancel your credit cards if you decide not to use them but rather just put them away so that you won't use them. Canceling an account will work against you.

Within six months to a year you can dramatically increase your credit scores and repair your credit quite a bit. Just be unfailing and on time with all of your payments, use your credit sparingly and do not apply for credit needlessly. With just a bit work and a bit time you can repair your credit.

by: Elizabeth N Brown

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