People who know the rules of credit will get better rates and service. Most of us need to perform regular maintenance on our reports.

What actually goes into a credit score:

Credit scoring is made up of a complex mathematical formula. There are many variable bits of information that go into a score. The score that you get reflects what the credit report contains, who is pulling the score and what kind of software they are using. Your score from Experian, Equifax, or Trans Union can change from HOUR TO HOUR or Day to Day.

A person's overall credit profile will determine the importance of the following factors:

35% of a borrower's score is determined by their track record. The Payment History shows how they have handled credit in the past, if they have paid promptly or slowly, and if there are any judgments, tax liens, collections, wage attachments, etc.

30% of the score is based on how much the Borrower owes. How much is too much? Owing a great deal of money on many accounts may indicate that a person is overextended and this can lead to slow payments or no payments. If you are up to 90% of the limit on your credit cards or if there are collections or charge-offs, your scores will be dramatically lower than someone who owes little money on their credit cards.

15% of the score is based on the length a borrower's credit history can be documented. Consumers who have had use of credit for only 10 years or less are considered "newbies".

10% of the score is based on the recent activity and new accounts. Inquiries occur if new accounts have been added, if you have applied for new credit, or if you are "shopping" different companies for credit.

Lastly, 10% of the score is reflective of the types of credit in use. A healthy mix would be a real estate loan, car loan, and a few credit cards with remaining credit available on the accounts.

The credit repositories (CRAs) are responsible for the information that they are reporting on you. If they cannot verify it is true or not they must delete the item!

Contact Sherida Studwood to evaluate your credit (no obligation to buy) @  443-757-5000 ext. 109.