A- How important is my credit?
1- Understanding your credit
Either purchasing or refinancing your home, to qualify for the best mortgage, your credit plays a critical role. It is so common, that many borrowers are not aware about the mistakes already in their credit files that affect their scores negatively. It is surprising to all, who face these problems when they apply to a new mortgage and the broker informs them about the problem.

The mission of this website is to guide you through the steps of improving and maintaining your credit by yourself, with a professional assistance, which usually requires a bill to be paid at the end.

2- Fico Score Explanation
Every member of this society in this country is entitled with a social security number. Your social security number is your most valuable asset, which needs to be protected very carefully. The credit bureaus are institutions, which store all the history of the transactions that each individual is making on a daily basis. When storing these information they store it under someone’s social security number. The shopping in the supermarket, the clothing you buy at the mall, the car loan you sign for, the credit cards that you apply for is informed the three credit bureaus on a monthly basis. If you have a dispute in a bill that you have received at a hospital and you don’t want to pay it, it will be recorded to the credit bureau. The collection that happened due to non payment of a bill or a disagreement will be definitely reported as not paid. All the transactions of that kind will be kept in the files until a credit rating company asks the bureaus about your information with your authorization. This only happens, when you apply for a new line of credit, which could be as low as a $500 credit card up to a mortgage of $500.000. That is when a company, with which you have applied for the credit, is going to order you scoring from one of the approved credit rating organizations.

The credit rating company will get the information from the credit bureaus and evaluate your score regarding the type of credit you are applying. The criteria used will be different in each case. The criteria used is more strict when you apply for a mortgage than applying for a $500 credit card.

Your credit score (FICO) is a numerical value between 350 and 900. This will rank you, as the borrower regarding your credit history, which is already stored within the files of the credit bureaus. It will rank you regarding the credit amount available, the amount of used credit, your payment history, collections, judgments and other factors. It is very important that you have to understand, that the credit bureaus do not grade your credit. They only store information. It is usual that any of the information stored could be a mistake. It is to your benefit to follow up on your credit information and correct the mistakes if you become aware of it. This will also prevent any fraud attack on your file, which is the fastest growing illegal activity nowadays.

The Fair Credit Reporting Act (FCRA) allows the borrower to know what the current information is in their file and dispute any mistake. It is to your benefit to read and learn more about your rights in this matter. If you get denied for a loan that you have applied for, you have the right to know why it has been denied.

3- A, B, C & D Credit

Once your information is pulled from the credit bureaus and graded regarding the criteria for a loan that you are applying for, the credit rating agency will give you a numerical value as your credit rating result. This number will be between 350 and 900. The banks, financial institutions will consider your score regarding the loan you apply. It is usually a market standard to grade borrowers as following:

A credit if the score is in between 900 and 620
B&C credit if the score is between 620 and 500
D credit if your score is between 500 and 350

Going down in the scoring, that individual will be considered a more risky client to the financial institution that you have applied for a loan.

4- Agency Listings

Experian
PO Box 9600
Allen, TX 75013
Attn: Consumer Affairs
www.experian.com
888-397 3742
to dispute and order credit reports

Equifax
PO Box 740241
Atlanta, GA 30374-0241
Attn: Consumer Affairs
www.equifax.com
800-685 1111
To dispute and order credit reports

Transunion
PO Box 1000
Springfield, PA 19022
Attn: Customer Disclosure Center
www.transunion.com
800-888 4213
To dispute and order credit reports

If your credit has been denied in the past 60 days for any reason, you have the right to ask a free copy.

B- Credit Maintenance
Here are some criteria that affect your credit scoring: a- The payment history will remain in your file as long as it is reported. Any late payments will remain in your report for many years even though you make a full payment for the debt. It will definitely affect your score negatively.
b- Collection accounts will remain in your file for 7 years.
c- Any court decision, including the Chapter 7 and 11 bankruptcies will remain in your file for 7 years, including the result if it is satisfied, discharged or dismissed.
d- The limits and the balances on your lines are considered in your evaluation. That means, keeping the balances low on your credit lines will have a positive impact on your scoring.
e- Records showing how many times your credit has been checked is another factor on the credit rating. It is wrong understanding, that your credit score will be decreased if a lender checks your credit. It will affect your credit score more, if different lenders from different sectors would be looking to your credit intensively. For example, if you are shopping for a mortgage and at the same time trying to buy a car that means your credit will be checked intensively within a short period of time. In this case you should expect lower scores and definitely more difficult conditions in your next application for a loan. The difficulty would be higher interest rates or a request for more down payments.
f- Consistent work place address will increase the score in your evaluation.
g- Do not close excessive credit lines. Leave them active and hold on to the card or the credit line as long as possible.

C- Repairing the Damaged Credit
If your have any information stored with the credit bureaus that looks to you incorrect, you have to take initiative to correct or dispute the wrong information. Every time you apply for a credit, a loan or a mortgage, you will hit the same problem again and again. There are different ways to get the mistake corrected. Some will cost you only time and patience and some time and money. You could write dispute letters to the bureaus and force them to correct the information. It is the legal responsibility of the bureaus to respond to your letter within 30 days. If the bureaus do not respond to you within the 30 days as described in the Fair Credit Reporting Act (FCRA), they have to accept your dispute and correct the mistake. In each case, the bureaus will sned