35% = Your Payment History: (bankruptcy, judgments, foreclosures, & other public records; severity, recentness, & frequency of delinquencies) A LATE PAYMENT WILL BE 3.5 TIMES AN INQUIRY!

30% = Amount of Debt you have: (number of balances recently reported, average balance across all trade lines, relationship between your credit limit & the amount you owe currently)

15% = Length of Account: (age of OLDEST trade line & # of new trades)

10% = Acquisition of NEW Credit: (number of inquiries and any new accounts open within the last 12 months. Length of time since last inquiry)

10% = Types of Credit: (do you have mainly mortgages? Installment Loans? Credit cards? Department stores? Finance Companies?)

IF CREDIT SCORE IS <600 = 1 in 8 will default!!!!!!!!!

Credit Scores can change by the minute. They are the same as mortgage pricing or the stock market. They are updated with new data hundreds of times a day! Small creditors may only report to the repositories once a month. Large creditors, however, report as much as 5 times per month!

4 Reasons are given after each score detailing why the score is not perfect. The first reason given is the most influential on the score. The second reason has the next greatest influence, & the last two "don’t really mean much at all".

There is a fast way to change INCORRECT information in your credit file, & therefore, your score. Several large credit reporting agencies (companies that report credit data & scores from the repositories to mortgage companies, banks, etc) offer a program called "RAPID RESCORE". This system allows for updated credit scores in as little as 5-7 working days, instead of the 3 to 6 months it would take to do it via letters, etc, by yourself. Their fee ranges from $75 to $150.

Rapid Rescore may be worth it if you need to get your score up to qualify for a home mortgage or other financing. It definitely would be worth it if it could impact your #1 reason (most influential, remember) for not being a perfect 850. A score can only be changed in this way if the borrower can obtain a signed letter from the company/creditor in question (on letterhead) stating that the information is incorrect & it should be removed.

INQUIRIES are not as bad as people make them out to be. Although they cannot be removed from a credit file, all mortgage & automobile financing inquiries occurring within a 14 day period will only count as a single (one) inquiry. This allows a consumer to shop for a mortgage or car loan without lowering their score much at all. In fact, in 1998 Fair, Isaac & Company created a 30 day buffer where as additional mortgage & auto inquiries come up on the report after that initial 14 day period, they will appear on the report but will not be used in the score calculation! This gives consumers a 30 day window to shop for loans.

COLLECTIONS ARE A BAD THING. Unfortunately, when collections are paid, it is "activity on a derogatory account", and it HURTS the credit score. It is far better for a borrower to pay the existing collections AT CLOSING so as not to affect their score prior to closing! Lenders should never require a collection to be paid prior to closing & then request an updated credit report. This may keep the borrower from qualifying!

Active accounts have the 3^rd largest impact on scores, after pay history & amount of debt. If there isn’t at least a 6 month history on the credit report, it can HURT the score. The more inactive accounts being reported, the lower the score will be. So, if you have an open account that you don’t plan on using again, CLOSE IT! It is safe & good to close inactive accounts, if possible. "No Activity" is what credit scoring feels most nervous about because it doesn’t know if you’ll pay that debt on time IF you charge something.

New accounts need at least a 6 month history in order NOT to negatively affect the score. After 6 months it could positively affect the score, if there are not too many open & active accounts. DO NOT CLOSE AN ACCOUNT THAT HAS A RECENT BALANCE OR PAYMENT HISTORY in hopes that your score will improve.

FINANCE COMPANIES: Credit scoring models HATE finance companies. Anyone can get a loan at a finance company if they are willing to pay 21-39% interest. Credit & ability to pay are seldom an underwriting factor. Watch out: Your furniture store, computer store, or jewelry store may sell their paper to a finance company!!

Home Equity loans may be listed as "revolving" on credit reports. If you have a HELOC make sure your lender is reporting you as a "mortgage" and not as a "revolving" account as mortgages are more favorably valued by the scoring system.

CREDIT CARD BALANCE VERSUS CREDIT LIMIT: If you owe more than 30% of the credit limit it can hurt your score slightly. If you owe more than 50% of your credit limit the score is impacted more. Paying down the balance or requesting a credit line increase can help. Having 1-3 credit cards (no inactive) and less than 30% of your credit limit for a balance can IMPROVE your score. 3-6 cards is worse, and more than 6 is bad.

• BANKRUPTCY = 10 years from DISCHARGE
• Judgments = 7 years from date of entry or applicable statute of limitations, whichever is longer
• TAX LIENS (PAID) = 7 years from paid date
• TAX LIENS (UN-PAID) = no limitation
• COLLECTIONS = 7 years
• Profit & Loss/CHARGEOFF’S = 7 years