ABOUT CREDIT SCORES

Credit scores affect every aspect of our financial lives including qualification for mortgage loans, personal loans, business loans and auto loans, the interest rates we pay, employment opportunities, and even insurance premiums. Restoring your credit profile is one of the most important financial decisions you can make. Horizon Credit Repair, Inc. is a nationally trusted credit auditing, consulting, and verification firm that make the credit building process convenient, personal, secure, and effective.

A FICO (Fair Isaac Company) or credit score is based on information drawn from your credit report. About 30 individual factors are used to determine the score. Certain factors, such as payment history, have more weight than others, such as the length of your credit history. However, a factor may be more important to your credit score than to someone else's score because of differences in individual's credit reports. Also, each factor's importance can change as your credit report changes.

Factors can be categorized in five areas:

Payment history

Payment information on credit cards, installment loans (such as a car loan), mortgage loans or finance company accounts. Are there public record items, such as judgments or bankruptcy, and collection items? Details on late or missed payments, including how much was owed, how late the payments were and how recently they occurred. How many accounts show no late payments. According to Fair Isaac, this category usually determines about 35% of your score.

Outstanding debt

Amount owed on all accounts and on different types of accounts, such as credit cards or installment loans. How many accounts have balances? How close are you to each credit limit? According to Fair Isaac, this category usually determines about 30% of your score.

Credit history

How long have you been building a credit history? How long specific accounts have been established and how long since you used each account? According to Fair Isaac, this category usually determines about 15% of your score.

Pursuit of new credit

How many inquiries and new accounts does your report show, and how recent are they? How long has it been since the most recent inquiry? Whether you have made on-time payments to re-build your credit after a period of frequent late payments. According to Fair Isaac, this category usually determines about 10% of your score.

Types of credit in use

How many accounts are reported for bank cards, travel and entertainment cards, department store cards, installment loans, and so on. According to Fair Isaac, this category usually determines about 10% of your score.