Frequesntly Asked Questions

You've Got Questions About How To Fix Credit...And We've got Answers

What Makes Up My Credit Score?

Credit scores are used by creditors to measure the 'risk factor' of a consumer who is applying for a loan or credit line. The credit score was put in place to reflect the financial responsibility of a consumer, through past and present credit use. Creditors use the score to 'predict' how a consumer will treat their potential financial obligation.

As a 'snapshot' of your financial history, your credit report is essentially your 'financial fingerprint' and contains information that can be grouped into the five categories listed below.

1. Payment History - 35%
2. Amount Owed - 30%
3. Length of Credit History - 15%
4. New Credit - 10%
5. Types of Credit in Use - 10%

While we have the above information we still do not know the specific formula to calculate credit scores. The credit score algorithm is closely guarded by its originator: Fair Isaac Co. (also known as FICO).

What Are The Main Credit Bureaus?

The three credit bureaus are: Equifax, Experian, and TransUnion.

The websites are:

• www.Equifax.com
• www.Experian.com
• www.TransUnion.com

Fair Isaac is not a credit bureau. It is the company who develops and maintains the FICO score.

What Are Inquiries?

Part of your credit score considers the number of inquiries made for your credit report. Credit inquiries are placed on your credit report each time a business requests a copy of your report. The Fair Credit Reporting Act (FCRA) requires businesses to have an acceptable reason for accessing your credit report. Acceptable reasons include:

• To grant credit
• Collect a debt
• Underwrite insurance
• Employment
• License issuing by some government agencies
• Legitimate business transactions

Each inquiry that reports can drop your credit score any where from 2-5 points. The inquiries on your credit report will remain for two years but only affect your credit score for one year.