Credit score determines whether you will be approved for a loan. It is a mathematically calculated number developed by the Fair Isaac Corporation (FICO) that lenders use to rate potential customers in determining the likelihood that a customer will pay their bills on time.

Payment history shows the history of how you paid your bills either on time or late but unfortunately does not show if your bills were paid before the due date. Amounts owed shows the total amount of credit you have available. If your balance is near the credit limit this may lower your credit score. The length of history indicates how long you have had credit. If your credit history is 2 years or less could lower your credit score. New credit indicates how many times you have applied for new credit. If you open two many new accounts in a short period of time this may lower your credit score. The types of credit used indicate the types of accounts you have such as revolving or installment accounts. Revolving accounts are usually credit cards and installment accounts are usually mortgages, auto loans, etc.

Having a good rating means having more opportunities to purchase. If you plan on purchasing a large item such as a car, house or investment property, it is best to pull your credit yourself to see if any negative items appear so you can fix those issues before applying for a loan. The best way to understand your score is to do research and read the information that is provided when you order your credit report.

If you have poor scores, you should consider restoring it. The best way is to find a reputable credit repair company. There are numerous online companies. It is very time consuming, this is why also why the repair services must charge a fee. The fee will vary depending on where you go for you credit repair services. Some services offer a free 30 day trial. Some offer guarantees of free repair or your money back.

When you begin your credit score repair the quickest way to get started is to highlight all of the small amounts that you can afford to pay. If you have any amounts that are less than $100 on your report then you should pay them immediately. These look the worst on your credit. If you think you can repair your credit on your own then you can. You should start with the smaller amounts first. You should call one creditor at a time. Call each of the creditors and ask them for the payoff amount. Most creditors who show negative on your credit will be happy to get anything. Most of your creditors will accept a deal to pay 60% of the debt owed rather than the full amount. If they accept a deal with you then you should have this agreement faxed to you. You should also demand a receipt for payment and attach to the agreement.

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