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Credit Score Rating Factors
Credit Score Rating Factors
Credit Score Rating Factors
Credit Score Rating Factors
Credit Score Rating Factors
Credit Score Rating Factors
Credit Score Rating Factors
Credit Score Rating Factors
Credit Score Rating Factors
Credit Score Rating Factors
Credit Score Rating Factors
Credit Score Rating Factors
Credit Score Rating Factors
Credit Score Rating Factors
Credit Score Rating Factors
Credit Score Rating Factors
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Credit Score Rating Factors

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The Anatomy of a Credit Score . Learn how credit scores are determined and how each individual factor will impact your credit score.

The Anatomy of a Credit Score . Learn how credit scores are determined and how each individual factor will impact your credit score.

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  • 1. The Anatomy of a Credit Score How Credit Scores are Determined BadCreditChannel.com
  • 2. Understanding Credit Scoring <ul><li>CREDIT REPORT FACTORS </li></ul><ul><ul><li>A. Credit History </li></ul></ul><ul><ul><li>B. Delinquent Accounts </li></ul></ul><ul><ul><li>C. Credit Card Accounts </li></ul></ul><ul><ul><li>D. Public records, foreclosures, & Collection </li></ul></ul><ul><ul><li>E. Inquiries </li></ul></ul>
  • 3. Understanding Credit Scoring <ul><li>Credit History shows how well debt has been paid over time </li></ul><ul><li>Older account has greatest impact </li></ul><ul><li>New accounts aren’t higher risk so long as paid on time </li></ul><ul><li>Can substitute non-traditional credit </li></ul>
  • 4. Factors Into Credit Score <ul><li>Major derogatory items </li></ul><ul><li>Time at present job </li></ul><ul><li>Occupation </li></ul><ul><li>Time at present address </li></ul><ul><li>Ratio of balances to available credit lines </li></ul><ul><li>Number of credit lines on report </li></ul><ul><li>Number of years one had credit in the credit bureau database </li></ul>
  • 5. Years at Current Address <ul><li>Years at Current Address </li></ul><ul><li>The longer you stay in one place better you will score </li></ul><ul><li>Points Added/Subtracted </li></ul><ul><li><.5 year 12 </li></ul><ul><li>.5 – 2.49 Yrs 10 </li></ul><ul><li>2.5 – 6.49 Yrs 15 </li></ul><ul><li>6.5 – 10.49 Yrs 19 </li></ul><ul><li>>10.49 Yrs 23 </li></ul><ul><li>No Info 13 </li></ul>
  • 6. Do you Rent or Own? <ul><li>Own or Rent? </li></ul><ul><li>Homeowners will score more points. </li></ul><ul><li>Points Added/Subtracted </li></ul><ul><li>Own 25 </li></ul><ul><li>Rent 15 </li></ul><ul><li>Other 10 </li></ul><ul><li>No Info 7 </li></ul>
  • 7. Existing Credit Cards <ul><li>Existing credit cards and store cards. </li></ul><ul><li>Consumers who have both credit cards and store cards will score higher. </li></ul><ul><li>Points Added/Subtracted to Credit Score </li></ul><ul><li>None 0 </li></ul><ul><li>Department 11 </li></ul><ul><li>Major CC 16 </li></ul><ul><li>Both 27 </li></ul><ul><li>No Info 10 </li></ul>
  • 8. Have a Bank Account? <ul><li>Bank Reference </li></ul><ul><li>Consumers who have both a checking and savings account will score higher than those with only one type of account or none at all. </li></ul><ul><li>Note: If you have been denied a bank account due to bad credit you can open a guaranteed checking account . </li></ul><ul><li>Points Added/Subtracted to Credit Score </li></ul><ul><li>Checking 5 </li></ul><ul><li>Savings 10 </li></ul><ul><li>Both 20 </li></ul><ul><li>Other 11 </li></ul><ul><li>No Info 9 </li></ul>
  • 9. Debt Ratios <ul><li>Debt Ratios </li></ul><ul><li>The lower the debt ratio, the higher the score. </li></ul><ul><li>Points Added/Subtracted to Credit Score </li></ul><ul><li><15% 22 </li></ul><ul><li>15-25% 15 </li></ul><ul><li>26-35% 12 </li></ul><ul><li>26-49% 5 </li></ul><ul><li>>50% 0 </li></ul><ul><li>No Info 13 </li></ul>
  • 10. Number of Inquiries <ul><li>Number of Inquiries </li></ul><ul><li>Consumers will be penalized for having more than 3 inquiries. </li></ul><ul><li>Points Added/Subtracted to Credit Score </li></ul><ul><li>0 3 </li></ul><ul><li>1 11 </li></ul><ul><li>2 3 </li></ul><ul><li>3-4 -7 </li></ul><ul><li>5-9 -20 </li></ul><ul><li>No Record 0 </li></ul>
  • 11. Age of Credit File <ul><li>Years in File </li></ul><ul><li>Consumers with older consumer credit files score higher. </li></ul><ul><li>Points Added/Subtracted to Credit Score </li></ul><ul><li>< 1 Year 0 </li></ul><ul><li>1-2 Years 5 </li></ul><ul><li>3-4 Years 15 </li></ul><ul><li>5-7 Years 30 </li></ul><ul><li>>8 Years 40 </li></ul>
  • 12. # of Revolving Lines <ul><li>Number of Revolving Lines </li></ul><ul><li>Consumers with 1-2 revolving lines score higher than those without any, or with more than 3 </li></ul><ul><li>Points Added/Subtracted to Credit Score </li></ul><ul><li>0 5 </li></ul><ul><li>1-2 12 </li></ul><ul><li>3-5 8 </li></ul><ul><li>>6 4 </li></ul>
  • 13. Unused Balances <ul><li>Percentage of Balances Available </li></ul><ul><li>Those with an unused balance of 0-15% score highest. Those with high unused balance percentages are penalized. </li></ul><ul><li>Points Added/Subtracted to Credit Score </li></ul><ul><li>0-15% 15 </li></ul><ul><li>16-30% 5 </li></ul><ul><li>31-40% -3 </li></ul><ul><li>41-50% -10 </li></ul><ul><li>>50% -18 </li></ul>
  • 14. Derogatory Credit <ul><li>Derogatory Credit </li></ul><ul><li>Derogatory credit will significantly lower a consumer’s credit score. </li></ul><ul><li>Points Added/Subtracted to Credit Score </li></ul><ul><li>No Record 0 </li></ul><ul><li>Any Record -29 </li></ul><ul><li>Slow payment -14 </li></ul><ul><li>One Satisfa. 17 </li></ul><ul><li>Two Satisfa. 24 </li></ul><ul><li>Three Satisfa. 29 </li></ul>
  • 15. Factors that cannot Influence Credit Scores <ul><li>Age </li></ul><ul><li>Gender </li></ul><ul><li>National Origin </li></ul><ul><li>Sources of Income </li></ul><ul><li>Race </li></ul><ul><li>Religion </li></ul><ul><li>Marital Status </li></ul><ul><li>Income Level </li></ul>
  • 16. Secrets to Getting a High Credit Score <ul><li>Don’t move too often, buy a house and stay there =) </li></ul><ul><li>Avoid derogatory credit at all costs </li></ul><ul><li>Maintain a unused balance between 0-15% and do not go above 30% </li></ul><ul><li>Maintain 1-2 lines of revolving credit </li></ul><ul><li>Open and keep a credit card and department store card </li></ul><ul><li>Open and keep a checking account AND a savings account </li></ul><ul><li>Keep your debt ratio below 15% </li></ul>

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