Credit repair services and resources for Americans.

Of the variables used in credit scoring, some of the most important include; history of bill payment, number of bank accounts, type of bank accounts, collections actions previously employed against them, outstanding debts, size of outstanding debts, and bankruptcies. Credit models compare these and other variables against other consumers of similar age and background. This statistical system is based on empirical research which lessens the reliance on the opinions of lenders themselves in making educated decisions about lending money. Through this system, a credit score is intended to reflect the ability and likelihood of a person successfully repaying and managing debt.

In essence, a credit score is a predictor of a person's suitability to be entrusted with someone else's money.

Do you know your credit score? Fill out a free online credit assessment and find out today!

Credit scoring system's rely heavily on the information contained in a person's credit report. It for this reason that fixing bad credit reports - those that contain inaccurate, outdated, or false information - is critically important to improving credit scores.

There are some types of information that are not permitted to be used in credit scoring systems. Examples include race, sex, religion, and marital status. Although scoring systems can use age, they are not permitted to use age characteristics as a barrier for providing credit to elderly individuals.

Many lenders use different scoring systems and models depending on the type of credit being applied for. Some systems rely more heavily on random samples, whereas others will focus more on samples sharing similar financial circumstances. Typically, credit scoring models will differ due to the variables used and the importance given to those variables, which is one part of the reason why one institution may deem you more or less worthy of obtaining
credit.

Important variables shared by most Credit Scoring Models

Certain basic variables are usually included in most scoring models. These include, but are not limited to;

Debts Outstanding

Both the amount and the type of outstanding debt is important, as is your history of repaying such debt. Of obvious significance is how close the amount of outstanding debt is to the amount of credit being sought.

History of Bill Payment

Paying bills consistently and on time is an important consideration. Any history of bills forwarded to collection agencies is a strong negative.

Preexisting Credit Accounts

How much credit do you currently have and what type of credit is significant.

Other Credit Applications

Creditors are able to assess the number of recent credit applications applied for by viewing the number of recent inquiries for your credit report. Any and every lender you've applied to for credit is listed on your report, including those who have prescreened you for credit and those who are monitoring your credit report.

Length of credit history

Generally speaking, the longer the credit history the better. Having said that, a short credit history should not be a hindrance provided it demonstrates timely debt repayment and low outstanding debt.

It is important to understand that some scoring models use information other than credit and debt to score and individual. These variables can include; assets, employment history, salary levels, health and insurance coverage, and other types of equity.

Although credit scores are a complex concept, there are certain very basic things any individual can do to help improve their credit score. The most important of these is to consistently pay down outstanding debts, limit new debt, and pay all bills on time - all the time. In very simple terms: Anything you can do to demonstrate financial responsibility will likely positively impact your credit score.

If your credit score does not accurately reflect your suitability for borrowing, credit repair may be a viable option to research. Understanding what credit repair services can and can't do for you is the first step.