The first step in learning the credit score basics is to learn what makes up a credit score. Although each credit bureau uses a somewhat different scoring model (FICO, FICO II, Vantage) what constitutes a credit score is represented by this infographic:
When people want to improve their credit score they mostly focus on removing derogatory or negative accounts from their credit report. They may try it themselves. Then after little or no results they call a credit repair company for help. Credit repair, or what we call credit restoration, is a good thing to do. Removing derogatory accounts will increase your score.
Obsolete Accounts– accounts older than 7 years from the date of last activity should be deleted automatically but sometimes they are not. We use federal law to get these items removed for you.
Accounts with Erroneous or Outdated Information– If these are negative accounts, removing them will increase your score. We also use federal law do get these items updated or removed.
Unverifiable or Unverified Accounts– These are accounts that the creditor of record cannot or chooses not to verify. These items will be removed via federal law if challenged in the correct manner.
Our company has been providing the fastest, most effective results in the credit repair industry since 2004.
However, that only impacts 35% of your credit score. There are other credit score basics to learn.
We can help you in every area of your credit score basics
Therefore, we provide other services that impact 100% of your credit score.
Let’s tackle the next biggest percentage, your amounts owed (30%)
If you can pay down the amounts you owe to 30% of your credit limit that will increase your credit score. For instance, if you have a credit card with a $1,000 limit, pay down the balance to $300. You may not think you can based on your budget but we have an online budget and debt payoff tool that will show you how to pay these accounts down. And, it will show you how to do that with the same amount of money you currently spend on your bills.
Next, the Types of Credit and New Credit (20%)
Sometimes it’s hard to understand that if you don’t have the right types of open credit accounts (revolving, installment) such as a car loan, mortgage, and credit cards you can’t have an optimum credit score. In other words, you have to have credit to have a good credit score. And you need new credit from time to time especially if you do not have enough open lines of credit.
We help people establish new lines of credit with a secured credit card program from Synovus Bank and a program that will add a positive rental history to your Transunion credit report. And, we will make other recommendations to you as well.
Lastly, Length of Credit History (15%)
This one just takes time. We have to get you the right types of credit, remove negative items, and let it season. Over time your credit score will go up based on the length of credit history.
Dale Guiducci is the owner of ERA Credit Services offering credit repair in San Diego and credit repair in Clearwater, FL and credit repair in Tampa, FL. ERA Credit Services is an Independent Agent for Financial Education Services (FES) which has an A+ rating and is accredited by the Better Business Bureau. Mr. Guiducci is also a Vice President with Financial Education Services and trains new Agents for FES on a national level.