Credit Report Items and Credit History Information

People with no credit history have just as hard a time getting approved for loans as people with a bad credit history. You should open at least one small credit card account (credit cards seem to be more than willing to give a credit card to someone with no credit history) and show at least 6 months to a year of on-time payment history before you start applying for other types of loans. Word from the wise: don't go beserk with that credit card; in fact you should cut it up after you've established enough credit good history to be considered for loans.

What is the lowest and the highest possible FICO score?

The worst possible FICO score that you can receive is 300. At 300, you basically never pay a bill ever. Multiple charge-offs, defaults, and probably a bankruptcy. The very best score that you can receive is an 850. It is very rare that anyone have a perfect FICO score. According to Bankrate.com, people with the best credit rarely exceed a FICO score of 825.

How do I dispute an inaccuracy on my credit report?

The first step to disputing an inaccuracy on your credit report is to order the full report. You can get your report for free annually from www.annualcreditreport.com . Next, once you identify what needs to be disputed, you have to inform the appropriate credit bureau (Experian, Transunion, or Equifax) in writing of what is wrong on your credit report. Make sure that you clearly outline what is wrong, why, and specifically request that the item be deleted or corrected. You may even have to provide proof where possible. You should also send a letter to the creditor telling them that the information is incorrect and to please fix it. You cannot submit a dispute online in most cases. The credit bureau will do an investigation and has to make a decision within 30 days.

How are FICO scores calculated?

FICO scores are a "snapshot" of your credit worthiness at any given time in history. It is calculated using these five general categories and percentages.

Payment history - 35% (Have you paid your obligations on time?)

Amounts owed - 30% (How much do you owe, what are your balances? What percentage of your available credit is being used?)

Length of credit history - 15% (How long have you been establishing credit?)

New credit - 10% (Information about your newest credit accounts opened, how many new inquiries, etc.)

Types of credit used - 10% (Revolving credit [credit cards], mortgages, or installment loan?)

Source:

MyFICO Credit Education www.myfico.com/crediteducation