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Understanding Credit

Personal Credit Scores

The FICO System is the mathematical model that was devised to predict credit risk of consumers. It is the model that is most used by lenders when evaluating whether to extend credit. Scores range from 300 to 850, meaning that the higher the score, the lower the risk. There are several websites that can give you more insight about credit and how to protect it:


How to Improve Your Credit Score

Tips to Increase Your Credit Scores

  • Pay accounts on a timely basis

  • Pay down the balance on revolving accounts.

    Credit scores are more negatively impacted by late payments on revolving credit. By reducing the balance but not closing the account, you can improve your score. Note: it takes credit bureaus at least 40 to 60 days to reflect a lower balance.

  • Avoid "credit surfing"

    Shifting around credit balances from one account to another is called "credit surfing.". The combination of inquires and newly opened balances, especially new balances will appear before the old one shows as paid.

  • Avoid finance company credit

    Cash loans from a finance company can impact your credit negatively. Borrowers should also avoid 90-day- 12 months same as cash financing in the months preceding a loan application.

  • Check the accuracy of your credit and fix incorrect information

  • Avoid creating numerous inquiries as each inquiry can lower your score

What's in a Credit Score?

What Affects a Credit Score?

High Outstanding Debt

Keep balances low on credit cards and other similar debt.

Delinquent Payments

Paying off a collection account doesn't remove it from your credit report. Unless you obtain a letter of deletion from the collector, it remains on your credit for 7 years.

New Accounts

Don't open a lot of new accounts if you are just starting out.

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