subject: Determining Your Credit [print this page] If you want successful credit restoration, it is important to know how your rating is determined. People with good credit are doing certain things to keep it that way. People who need credit restoration help have been doing the wrong things.
Credit ratings are determined by some main points. Each rating will differ in various places around the world, obviously, but there are similar factors with each. Here are the main ways that your credit will be decided.
Payment history will affect your score. If you have a history of paying off your bills, you will have a higher score. Delinquent payments will lower your score, sometimes very dramatically.
2. Debt is also taken in to account. If the lenders see that the client has a lot of debt then it shows that they are not good about living within their means. Best ratings go out to people who don't have debt higher than 15% of their income.
It is also important to limit the number inquiries you have open. Credit inquiries are always going to be recorded. However, inquiries such as pre-screenings do not affect your score in a bad way.
The inquiries that will affect your credit are called hard inquiries. These are done when a lender pulls your file, such as when you are seeking a loan from them. These inquiries will affect your credit score if you have too many hard inquiries at the same time.
Credit Lines - If you have credit lines that are not used, this might affect your credit score. But at the same time, closing your credit lines will also determine your credit score. A lot of credit restoration places may advise you to close a credit line that you aren't using, but be sure that it is not an account that has a lot of credit history with it. It will be much better on your credit if you close a newer account than an older one.
The last factor is how many credit accounts you have open. What types of credit are you using? Having more than one type of credit line makes you look more well rounded, thus improving your score.
