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Sept. 17, 2011 - PRLog -- Has Your Financial Life Been Affected?

The economic  crisis has pretty much taken us all by storm. With that said it's time to start rebuilding your life and your credit history. Lost of income, health issues and other circumstances out of your control in many cases results in lost of homes, cars and everything you have worked for http://www.helprebuildmycredit.com

However, you and I both know that these tough economic times are only temporary. So therefore, the first step in rebuilding your credit is understanding where you stand.  

The only way to find out is to take a look at your credit reports so that the rebuilding process can begin.

Your credit score can have a negative affect on your life.

For example, you may understand that when you apply for a mortgage, the mortgage company will check out your credit score.

Did you know that the interest rate you can get on your mortgage and on credit cards will depend heavily on your credit score? Did you know that more and more employers will check your credit score when you apply for a job, and that insurance companies may raise your premiums or even cancel your insurance based on your credit score? Don't worry you can repair your credit and rebuild credit, with a few simple steps.

So, what is a credit score and how is it calculated?

Your credit score (in some cases,  is called your risk score) is a rating of your credit worthiness or how likely you are to repay a loan and how likely you are to repay it in a timely fashion. Not paying on time can have a dramatic effect on your life.

There are three companies that gather information on how you handle credit. They are Equifax, TransUnion and Experian. They each determine your credit score based on a formula developed by the Fair Isaac Corporation. Trans Union calls its credit score. Experian call it a Fico score, and Equifax will tell you its credit score is a Beacon.

Credit scores range from 400 to 850 with the average score somewhere around 659. Whenever your crdit score is low the greater the risk you are thought to be.

What are the factors that make up your credit score?

There are five factors that determine your credit score. The first of these is payment history. About 35% of your credit score may be based on how late you have been paying your bills (30, 60 or 90 days). The later you have been, the more negative effect this will have on your score.

About 30% of your credit score will be based on the amounts you owe. If you have, for example, a credit card that is close to its limit, this can impact your score negatively. This means it may be better for you to have a lower balance on several different cards oppose to having a  large balance on one card.

The third factor in your credit score is the length of your credit history. If you have an account that has been open for a long time, this can have a positive effect on your credit score. About 15% of your score will be based on the length of your credit history.

About 10% of your credit score will be based on how much new debt you have requested.

Having too much credit (over extended) can also have a negative impact on your credit score, even if you pay all your bills on time.

Like it or not, your credit score will also reflect how long you have lived in a single location, .  the number of years you've worked for the same employer and if you are a homeowner, you get additional points. The companies that score your credit just plain like to see stability.  
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