What affects your credit rating negativley? Does anyone know how the point values are based?

Question

Well, obviously I know WHAT affects it negativley -slow pay, no pay, being over your credit limit, etc. But, what I want to know is how do the 3 credit agencies ( TransUnion, Equifax, and ? can't think of the other one) put a point values up and/or down on things. For example - let's say you are late on paying your VISA card, by more than a month. So, they report as a "30 day past due" How does that affect your credit? Does that reporting cause your score to go down 5 points, 40 points, etc. ? Then, what action brings the score back up, and how many points at a time? Let's say I pay off the entire balance of a credit card, then close out that account... does that raise it up another 10 pionts, or as much as 50 pionts??? How long does it take for a bad reporting to "fall off " of your credit report. I know that each time a lender "pulls" your credit report, that in itself causes your score to drop. I would appreciate hearing from anyone who actually knows FACT regarding this-thanks

Answer 1

not sure, if you have time here's a big FAQ and more:
http://credit-cards.ebookorama.com
and here http://finance.ebookorama.com
if it helps please remember me :-)
good luck!

Answer 2

The three agencies are TransUnion, Equifax and Experian. The point system is a bit difficult to explain. If you are late on your card once, your score can go down by as much as 20 points. As a rule, make sure that you are paying on time, do not have more than 10 credit cards and keep your balance at about 40%. If you pay off a credit card and then close the account, your score actually drops. It drops by a few points. This is due to the fact that your overall limit was diminished by closing the account. Please note: This is crucial if you are planning to get a loan in the next six months or so. After that point of time, your score should gradually go up. Lender pulls of credit only affects your score by about 2 to 5 points per occurence. If four lenders pull your credit at the same time on the same day, all four counts as one pull. Negative info on your credit generally falls off after seven years of last known contact. Yes, I said contact. For example: Adam has a debt that he did not pay for 6 years and 10 months. A month later, Adam decided that he would want to pay this particular debt. He paid the debt after 6 years and 11 months. Guess what? Unless he made an agreement with the debtor to take off the negative info, this info will stay on the credit report for another SEVEN Years!! I hope that this info is clear enough for you. Good luck and I hope I was able to help you a little.

Answer 3

Your Credit score is based on the following criteria:

35% Payment history: As you can see your payment history is the largest chunk of your score. To keep this high, you must make your payments on time each and every month.

30% Debt to available credit: This is a ratio of the amount of credit you are actually using to the total amount you have available. It's best to use only 30-35% of your credit line. So in this case, if you have several credit cards, it's best to pay down your credit cards to that 30-35% ratio and keep them open, rather than pay off one credit card and close it.

15% Credit history: Any account with less than a 2 year history will detract from your credit score. Try to use your cards sparingly and not open new accounts frequently.

10% Type of credit: Credit that consists of secured installment loans like mortgages and car loans look better than credit that consists of unsecured revolving debt.

10% Inquiries: This is any time you request credit. An inquiry can impact your credit score from 2-25 points depending on what the request is for. You can pull your credit at any time without a negative impact on your score.

Negative credit stays on your report for 7-10 years. Usually if your mortgage shopping however, most lenders are interested in your payment history for the last 2 years.

I hope this answers your questions. If you'd like, please contact me at [e-mail] and I will send you a credit scoring booklet which has a ton more detail.

Best wishes!

Anne

Answer 4

amkornele is mostly correct. The actual "formula" used to calculate your score is propriatary and they don't disclose it.

But you can get a very good idea of what they use to calculate it by visiting http://www.myfico.com This is the home site for the people who developed the FICO scoring system, and they have lots of consumer information on how to improve your score.

Answer 5

Mom? Respectivily, Pay you bills on time. for a long time I have ruined my credit for some time and the the best thing that i HAVE DONEij years is years is pay on time My best advise is to pay on time and BE Pacient !