Credit Score analysed:

 

 

" The Fair Credit Reporting Act (FCRA) was designed to promote accuracy and ensure that credit reporting agencies maintain accurate information on consumer credit.

" The Federal Trade Commission (FTC) enforces the FCRA and monitors all three credit reporting agencies. The FTC can impose fines and close down any business that does not work on compliance with the FCRA.

" The FTC states that the maximum length of time a negative score can remain on your credit report from a consumer is 7 years, unless a public register. Bankruptcy and other public records can be legally allowed to stay on your credit report for 10 years.

" The credit reporting agencies have 30 days to investigate our challenges, according to the FCRA. Agencies can verify, modify or delete a negative element under investigation. If a creditor takes longer than 30 days to respond to your request CRA research, information is automatically removed. 

" It is important to note that agencies are authorized to temporarily delay the shipment of consumer reports by sending a notice within 30 days of receipt of applications and while an investigation is pending.

" The FTC also regulates the Fair Credit Billing Act (FCBA), which is designed to protect consumers from inaccurate information from their original creditors. The FCBA states that the consumer is not liable for unauthorized charges or other billing errors your original creditor. The FCBA also notes that the original creditor is responsible for the verification of any adverse event that the consumer has challenged, and is also responsible for any illegal activities by the participating collection agencies that the original creditor assigned to the account.

" The FCBA requires creditors to correct the original report incorrect information to credit bureaus.

" Fair, Isaac and Company of California originally developed the concept model of credit scoring for the use of financial institutions. Today, most credit agencies and lenders calculate your credit score (FICO) using their formula.

" Credit scores are increasingly used by potential employers as a factor of consideration for hiring.

" Credit scores are used today in a small scale to determine the auto insurance and utility rates.

" The credit score is a calculation of many different factors, including payment history, the proportion of debt against credit availability and the amount of credit used.

" The length of credit history account for 15% in consumer credit.

" The consumer's payment history counts towards 35% of the credit score.

" The type of credit that a consumer has opened, determines 10% of your credit score. The different types of credit include: guaranteed - mortgages, unsecured / revolving - credit cards - term car payments and small loans for home improvements.

" When calculating the credit score, the amount owed is an important indicator of the value of a consumer's credit, and amounts to 30% of your credit score. If a consumer is carrying a high balance in many of the accounts, creditors may see this as a sign of excessive financial debt, or perhaps irresponsible use of credit, and may designate the consumer as a high risk. Consumers should make every effort to keep the balances of the accounts within 35% your credit limit allowed.

" The number of new accounts set count towards 10% of the credit score.

" The best way for a consumer with little or no credit, is to established good credit history : apply for a secured credit card and make payments on time