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Top Credit Repair Secrets You Need to Know

This stands for Fair Isaac and Company which created the formula used by bureaus to evaluate the performance of borrowers. They make their money from informing financial institutions the level of risk they are taking when lending you money.

Your Pay History: FICO uses your pay history among other things to judge your reliability in paying loans if the banks give you one. Since your pay history makes up a third of your score, which is also 35 percent, you should know from now on that any problem you encounter in this area will have a serious impact on your rating. Late payments, for instance, are included in your payment history.

When they are recorded in your history, late payments pull your scores down and they warn creditors that you are a potential danger. With time and repair tasks, the effect of late entry will wear off.

Your Credit Balances: The balance to limit ration on your credit card should not be such that it will scare creditors off. FICO has made this simple to understand by releasing the six balances to limit ratios: 20%, 40%, 60%, 80%, 100% and over 100%. When you keep your balances between the first two ratios, 20% and 60%, you will be doing yourself a lot of good as it will automatically add some points to your score over time, and also send a simple message to the creditors: “you are a good risk that they can rely on.”

New Accounts: One secret that is known to only a few is that new accounts automatically lower your credit score. Since new accounts make up 10 percent of your total score, it is a good idea that you reduce financial activities that will put entries of new accounts in your report. Stick to this method and you are sure that your score will build up over time.

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