Credit Repair Information
When credit repair information is needed, consumers in the United States are wise to look first to the three major credit reporting companies operating in the country - Experian, Equifax, and TransUnion. Consumer lending entities of all kinds are likely to be subscribers to one, if not all three, of these bureaus. The first step in improving one’s credit rating is to find out what these three companies have to say about your individual credit worthiness.
Credit worthiness is the degree of likelihood that you will or will not repay any money you borrow. Bank loans, mortgages, student loans, and auto loans are all obvious forms of consumer borrowing but so are utilities payments and all purchases made on credit cards, including cards issued by gasoline companies and furniture and department stores. Any time a consumer has access to goods or services before paying for them in full, money has been borrowed.
Begin your search for credit repair information by requesting a copy of your credit report from each of these three credit bureaus. One free report per every 12-month period is allowed by US law so phone or write to each of these three consumer credit reporting companies to get a free copy. Review it thoroughly and become totally familiar with everything it says. These reports are the first step in repairing a damaged credit rating.
Each company assigns a credit score to each consumer. This number is often the defining factor in securing a low, affordable, interest rate but it can also be the basis for a loan application to be denied entirely. When credit scores are low, loans are less likely to occur, no matter how badly the consumer needs the money.
Credit scores must be purchased, unlike the free annual credit report, but these scores form the basis for evaluating all credit repair information that comes your way later.
Equifax sells the ScorePower credit score and Experian’s credit score is called PLUS score. TransUnion also sells a credit score. Each bureau uses a different formula to determine a score but they are all based on a risk-assessment calculation known as FICO, which stands for the Fair Isaac Corporation’s calculations.
Each credit reporting company uses a different range of scores, too. The actual FICO credit scores range from 300, for the poorest credit risks, to 850, which represents the highest, most desirable credit rating. By contrast, the VantageScore, sold by all three credit reporting companies, assesses risk in a range from 501 to 990.
Interestingly, the FICO score and those assigned by the big three credit reporting agencies are not based on a consumer’s income. Income is actually irrelevant to these assessments and is not used as a factor at all. What is important, however, is the individual consumer’s past record of borrowing and repaying. Repaying alone isn’t enough to earn a high credit score. Repaying on time, including making utility payments when or before they are due, is much more important to building a high credit score than income is.