Credit fix hacks the banks don’t want you to know about.
In school, you were always told about things going on your permanent record. The only permanent record you have as an adult is your credit score. However, your credit score does follow you around everywhere you go. Few credit repair secrets that I share with you, will help you to build a good credit score.
It decides whether you can get a loan to buy a car or house. It impacts your interest rates and insurance premiums. A bad credit score forces you to pay expensive deposits for rent, utilities, and mobile phone service. It can even affect whether you get a job or promotion.
Bad credit is like a black cloud hanging over you everywhere you go. It’s overwhelming and fills many people with uncertainty. But you don’t need to passively accept bad credit. Stop holding yourself back with fear and doubts. Debt can be conquered.
It’s possible to buy the car or house of your dreams. Taking control of your financial situation is a breeze when you know how.
What is Credit Repair
Credit repair is easier than it looks. A lot of companies claim to have credit repair secrets, but they won’t tell you what they are. That’s because at best, credit repair companies are charging a fee for things you can do yourself. At worst, they’re encouraging you to break the law.
I have no problem telling you credit repair secrets and hacks that I know work. Banks don’t like you knowing this information because they make money off bad credit loans with high fees and expensive collection actions. Credit cards for bad credit have much higher interest rates and will ultimately just make your situation worse.
Stop letting the banks bully you into overpaying today based on mistakes you made years ago. Credit repair is an achievable goal, and that’s what we’re going to talk about today.
Take control of your credit by using these secrets the financial industry doesn’t want you to know about. They’re all legal, and we know they work based on how credit reports work.
This is how to truly improve your credit score.
Anatomy of FICO Score
First, what are the components of your FICO score anyway? Your credit score is based on a secret algorithm designed byFICO, originally Fair, Isaac and Company. The details of this algorithm are still hidden under a veil of secrecy even today. Though we do know the formula is generally comprised of the following five components or factors. Feel free to skip ahead if you already know this. Continue to next secrets (Understand Your Credit Score).
Top 5 Credit score factors:
• Most Important factors – 35% Payment History
• Very Important factors – 30% Credit Utilization
• Somewhat important – 15% Length of Credit History
• Somewhat important – 10% Credit Inquiries
• Less Important factors – 10% Type of Credit Used
So, in a nutshell, the largest component of your score, Payment History, looks at missed or late payments. Credit Utilization subtracts your amount owed from your credit limit. Length of Credit History looks basically at the Average Age of Accounts (AAoA) and how long it’s been since they were used. Credit Inquiries or “Hard inquiries” happen when you authorize a creditor to check your score. Finally, by Type of Credit Used they mean Credit Mix. They like to see a variety of different types of credit account types, e.g., revolving, installment, open.
The 3 Credit Reporting Agencies
There are really only three Credit Reporting Agencies that you need to concern yourself with when talking about your credit score. Feel free to skip ahead if you already know this. We are discussing the basics of improving your Credit score so you need to know all this stuff.
Each credit reporting company sets their own standard and business model. Due to this each of them makes their own changes to scoring formulas according to their own rules. This change causes your credit score may very little bit for different reporting company.
Working of Credit Reporting Agencies
Equifax, Experian, and TransUnion are the big three credit report agencies. They keep tracks of your financial transaction and other information, including:
• Credit card balances
• History of balances of loan and credit cards
• History of payments on loan and credit cards
• Number and type of accounts you hold
• Bankruptcy filings
All these agencies mainly collect and maintain your credit information and then resell it to the other businesses.
For example, the Experian credit score is a FICO 8 score which ranges between 300 and 850. Similarly, the TransUnion score also ranges from 300 to 850. Like others, Equifax also provides FICO and VantageScore and uses different scoring models which ranges between 300 and 850.
Now let’s talk about small things you can do that can potentially make big impacts in your score to change your life!