Here is a piece from an email I received from a Credit Counciling/Repair agency. I thought it was worth sharing.

How is your credit score calculated?
The five most important factors:

35% Payment History – Record of paying bills indicates responsibility of credit.

30% How Much Is Owed – Total amount owed on all accounts as well as how much is owed on different types of accounts (credit card, auto loan, mortgages, and so on). Also, debt/credit ratio.

15% How Long Have Had Credit – You can have a good score with a short history; however, typically the longer one has had credit, the better.

10% The Last Application for Credit – How many accounts have been applied for recently.
How many new accounts have been opened
How much time has passed since applied for credit
How much time has passed since opened an account

10% Types Of Credit Used – Revolving debts, auto, mortgage, installment loans.

The most important thing about the above information is to educate ourselves and our clients on how to apply the above knowledge in creating a positive credit rating. Putting the facts into the reality of a good score for all of us is the challenge.

This is some excellent information that deserves some thread necromancy. Keep looking for news about this too because the credit bureaus have been known to change their algorithms from time to time.

I had no clue on how they came up with their scores. This is nice to know. I never realized either that they change them on occasion. Why do they do that I wonder?

Because with any mathematical algorithm, smart people can rig it for a perfect result. From a statistical standpoint this makes the algorithm useless.

I guess that makes sense so if you are constantly changing it then someone cannot figure it out. Never thought of that. But then again I never really looked into how it was figured out to begin with.

Yeah baby....
Isn't that the truth.
Credit companies and their $43 BILLION dollar profit a year.
Hmmpff.
They are vultures.

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Dru, this is very inspiring!

However, is it true that getting a bad credit rating will make it difficult for anyone to apply for a credit card or a much needed loan in the future?

Even though there is a heightened awareness of credit and credit scores these days in United States of America in general, just perhaps all the TV ads from companies selling credit reports & scores but unfortunately many are still unaware that a credit report is really only a series of "allegations" that are unproven and unfilled and even undocumented.

Just because a creditor says something negative about you and the credit bureau puts on your report, does NOT mean that it is "gospel truth" and many federal laws give you the right to challenge the "accusation".

Many believe that if an item on their credit report is true, it can not be removed, but that is NOT true! There are many ways to legally delete an item even when it is "factually true."

Do you think this makes sense to you?

Thanks,
Anta

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So how do you go about removing items on the credit report?

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Anyone looking of a credit counseling company?

That depends on the each and every case occur, perhaps... Anyone has experienced this?

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You have to show that you contacted the reporting company and if you get no response then you can petition the credit bureau to remove the item. It is a time consuming and lengthy process. It is easier to try to get the reporting company to do it.

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