Credit Repair Tips – Know Your Credit Report Score. Never Fall Prey To Loans Officer - By: Joey Lee

In order to correct a wrong, you need to arm yourself with the knowledge of where you went wrong and what to correct before you start negotiating to correct the mistakes. A lot of people assume that having an excellent credit score is enough when applying for a loan which is not the case in most instances. Certain lenders tend not to give you the best rates and will try to tell you that your credit score is lower than it is and that disqualifies you from a better rate. Some may exploit your ignorance about your credit score to quote you a worse rate. In counteracting this, you need to acquire certain amount of knowledge not to be manipulated by lenders. Here are some tips to help you better understand your credit report and credit scores.

Critical Components And Weight Percentages In Your Credit Report Score.
This is a rough but useful guide for industry estimated benchmarks as stated below. Knowing the rough weight assigned to the respective component of your credit report is the first step to understanding how to repair a bad credit score.

Payment History weighting is about 35 percent of total score measuring how timely and promptly you pay bills. The further back the event occurrences the lesser the weight allocated.

Outstanding Debt weighting is about 30 percent of total score evaluating your debt to credit ratio. The higher the debt to credit ratio, the lower will be your score. So try and maintain low outstanding balances with your credit lines.

Credit History weighting takes up about 5 percent of your total score. To do well in this category, your credit history must be long and you must have been prompt with your bills repayments and loans.

Recent Inquiries On Your Report weigh about 10 percent of your total score. You credit sourcing activities could inflate the number of inquiries into your credit report and hence drive down the score. So be meticulous in researching for your additional credit lines before approaching the lenders for quotes or negotiations.

The types of Credit you use weigh about 10 percent of your total score. Should your loans portfolio comprise of subprime loans, high interest rate personal credit lines, your credit report score in this category will be low.

The Range of Credit Report Scores.
Credit scores can range between 300 and 850. If you have a score of over 750 you have achieved Excellent Credit Rating. A very good status is between 720 and 750, acceptable if it is between 660 and 720, uncertain if between 620 and 660. You are deemed a high risk if your score is less than 620. With a credit score rating below average of 720, you might find it difficult to convince lenders to offer you good affordable loans.

Check the Big Three Credit Reporting Bureaus.
The three main credit reporting agencies in US here are Equifax, Experian, and TransUnion. You might find that there are deviating scores and ratings amongst the three of them and depending on which and how the report information is applied, your lenders might offer you loan packages at different rates.

Know Your Weaknesses and Negotiate With Confidence.
Hence, it is critical that you always have a good understanding of your own credit scores, where your weakness is and what the optimal remedies to the credit items are. Essentially, you need to know enough about your credit report in order to be able to negotiate with the situation. If you are quoted a rate you think is unfair, speak up and tell the credit officer that your credit score of 730 seems to indicate a better loan.

Better still, show the lender your printed copy of your credit score and highlight the key areas which you have done well. If the lender tries to tell you that lenders get more accurate credit scores than customers who look up their own credit scores or tries to tell you that your credit score has changed, walk away.

About the Author

Joey Lee is a CFP and MBA with 17 years of banking, financial, business & marketing experience and a Platinum Ezine Author. Learn authentic Credit Repair skills and comprehensive information on Credit Repair Tips, credit reports, credit scores at CreditRepairSkills.org

Article Directory Source: http://www.articlerich.com/profile/Joey-Lee/40886

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