Myths and Truth about Credit Scoring

Credit score is the key factor determining approval of almost any type of credit. It is based on the information contained in your credit report files. The widely used FICO score was developed by Fair Isaac Corporation, and it is a formula which assesses your potential credit risk.

The information used to calculate credit score can be broken down into five major parts. Your payment history with banks and other lenders will account for 35% of the score, the amount of money you owe for 30%, and the length of your credit history for 15%. New credit and a statistical assessment of how healthy your credit mix is will both account for 10%.

Credit score is not based in any way on the following information:

- references to debt management or credit counseling programs.
- person's marital status.
- current employment status, including how long with the same employer.
- credit report inquiries made by you, employers, insurance companies, or banks if made without your knowledge.
- what interest rates are charged on your credit cards, etc. - public assistance received.
- person's age.
- child or family support received.

You can increase your score by:

- always paying bills on time.
- paying off or reducing credit card and other debt.
- keeping old, unused credit cards, departments store cards and other "revolving" credit accounts open, even if you don't use them.
- not applying for credit very often.
- correcting mistakes on your credit reports.

Banks decisions are made according to their own standards.

While the majority of lenders use credit score as a key factor in approving credit, other facts play their parts as well, among them: your income, employment status and length of time at present address, to name a few. Each bank has its own standards. What score is acceptable for a particular loan or credit product depends solely on a lender. The person's credit score might not be high enough to get credit with one bank, and perfectly acceptable with another.

More about credit score and tips on improving your credit can be found at: How Much? - Comparing financial products.

Senior staff member for How Much?
http://www.howmuchanswers.com/

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table border=0 width= valign=top cellpadding=2 cellspacing=7trtd valign=top class=jfont style=font-size:85%;font-family:arial,sans-serifbrdiv style=padding-top:0.8em;img alt= height=1 width=1/divdiv class=lha href=http://www.citywebshopper.net/articles/includes/redirect.php?url=http://www.startribune.com/business/30847109.html%3Felr%3DKArksLckD8EQDUoaEyqyP4O:DW3ckUiD3aPc:_Yyc:aULPQL7PQLanchO7DiUlcid=1256838914ei=VCDySITAFKCQ6AO2qMGiAwusg=AFQjCNFCm7x3rvsexPswVsJYl2DqXVLDsAbCredit/b squeeze strangling businesses/abrfont size=-1font color=#6f6f6fMinneapolis Star Tribune,nbsp;MNnbsp;-/font nobr4 hours ago/nobr/fontbrfont size=-1Minnesota entrepreneurs are finding that they can#39;t find bcredit/b for their good business ideas. By HJ CUMMINS, Star Tribune You ever tried the product? b.../b/font/div/font/td/tr/table
table border=0 width= valign=top cellpadding=2 cellspacing=7trtd width=80 align=center valign=topfont style=font-size:85%;font-family:arial,sans-serifa href=http://www.citywebshopper.net/articles/includes/redirect.php?url=http://sify.com/finance/fullstory.php%3Fid%3D14764116cid=1256517725ei=VCDySITAFKCQ6AO2qMGiAwusg=AFQjCNE9IpYalsh7LvJWveWxNJ7vXbuAoQimg src=http://news.google.com/news?imgefp=KZJn5j1AWJEJimgurl=im.sify.com/sifycmsimg/sep2008/Finance/14757634_George_Bush_220.jpg width=80 height=55 alt= border=1brfont size=-2Sify/font/a/font/tdtd valign=top class=jfont style=font-size:85%;font-family:arial,sans-serifbrdiv style=padding-top:0.8em;img alt= height=1 width=1/divdiv class=lha href=http://www.citywebshopper.net/articles/includes/redirect.php?url=http://www.ctv.ca/servlet/ArticleNews/story/CTVNews/20081011/g7_meeting_081011/20081011%3Fhub%3DCTVNewsAt11cid=1256517725ei=VCDySITAFKCQ6AO2qMGiAwusg=AFQjCNEfCo8N0vJTlxMEQpWxld_3hTfLnQIMF endorses G7 plan to fight global bcredit/b crisis/abrfont size=-1font color=#6f6f6fCTV.ca,nbsp;Canadanbsp;-/font nobr13 hours ago/nobr/fontbrfont size=-1The International Monetary Fund is backing a plan by Canada and the other G7 countries to fight the worldwide bcredit/b crisis, which continues to play havoc b.../b/fontbrfont size=-1a href=http://www.citywebshopper.net/articles/includes/redirect.php?url=http://www.guardian.co.uk/world/2008/oct/10/georgebush-creditcrunchcid=1256517725ei=VCDySITAFKCQ6AO2qMGiAwusg=AFQjCNGBO0PNDSlRXKiiVdKKcFxd1Zm71gBush urges confidence in government#39;s ability to rein in bcredit/b crisis/a font size=-1 color=#6f6f6fnobrguardian.co.uk/nobr/font/fontbrfont size=-1a href=http://www.citywebshopper.net/articles/includes/redirect.php?url=http://www.kxmb.com/News/284670.aspcid=1256517725ei=VCDySITAFKCQ6AO2qMGiAwusg=AFQjCNGZphlnnfPNU6PeXMxWlOZC3IXi3AbCredit/b crisis meetings...Stimulus bill...Baseball playoffs b.../b/a font size=-1 color=#6f6f6fnobrReiten Television KXMB Bismarck/nobr/font/fontbrfont size=-1a href=http://www.citywebshopper.net/articles/includes/redirect.php?url=http://www.rnntv.com/Global/story.asp%3FS%3D9163035%26nav%3Dmenu566_2cid=1256517725ei=VCDySITAFKCQ6AO2qMGiAwusg=AFQjCNH86jR0kcM0GTx7LKs7ownD3Qn_IwWorld powers pledge to combat bcredit/b crisis/a font size=-1 color=#6f6f6fnobrWRNN/nobr/font/fontbrfont size=-1 class=pa href=http://www.citywebshopper.net/articles/includes/redirect.php?url=http://scotlandonsunday.scotsman.com/business/Europes-leaders-hold-more-crisis.4583297.jpcid=1256517725ei=VCDySITAFKCQ6AO2qMGiAwusg=AFQjCNH1o1IzlBwrFHyp7roSUjbS8_S4xAnobrScotland on Sunday/nobr/anbsp;- a href=http://www.citywebshopper.net/articles/includes/redirect.php?url=http://www.news24.com/News24/World/News/0,,2-10-1462_2408555,00.htmlcid=1256517725ei=VCDySITAFKCQ6AO2qMGiAwusg=AFQjCNFPxM94dsEoHZ8FQzYn8Ry27QB37AnobrNews24/nobr/a/fontbr/font class=p size=-1a class=p href=http://news.google.com/news?sourceid=navclientie=ISO-8859-1rls=GGLG,GGLG:2005-22,GGLG:enncl=1256517725hl=ennobrall 2,101 news articles/nobr/a/font/div/font/td/tr/table
table border=0 width= valign=top cellpadding=2 cellspacing=7trtd valign=top class=jfont style=font-size:85%;font-family:arial,sans-serifbrdiv style=padding-top:0.8em;img alt= height=1 width=1/divdiv class=lha href=http://www.citywebshopper.net/articles/includes/redirect.php?url=http://www.marketwatch.com/news/story/dtcc-addresses-misconceptions-about-credit/story.aspx%3Fguid%3D%257B7B5C1B13-9F34-44C0-971B-16EEF9FC0D64%257D%26dist%3Dhpprcid=1256578894ei=VCDySITAFKCQ6AO2qMGiAwusg=AFQjCNG2pb_5g1xOxLzOGznTK-6cGukCkwDTCC Addresses Misconceptions About the bCredit/b Default Swap Market/abrfont size=-1font color=#6f6f6fMarketWatchnbsp;-/font nobr20 hours ago/nobr/fontbrfont size=-1Since that time, the vast majority of bcredit/b default swaps traded have been registered in the Warehouse. In addition, all of the major global bcredit/b default b.../b/font/div/font/td/tr/table
credit - Google News

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