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What Goes into Your Credit Score?
Credit scores can be computed using different credit scoring systems but the most widely used system today is the FICO score. Its formula was created by the Fair Isaac Corporation and is the one used today by many lenders, banks, financial organizations and the major credit bureaus (Experian, Equifax, TransUnion.
The perfect FICO score is 850 and although achieving this number may seem unrealistic, getting a score ranging from 720 and above is already considered as good to excellent. However, a FICO score below 620 will put you in the category of a “high risk borrower”. Thus, it is recommended for everyone to be aware of the factors that make up their credit score.
Factors that Determine Your Credit Score Payment history. Your payment history comprises 35% of your total credit score. Here, how timely you are in submitting your payments, how long it takes you to pay your past due bills, how many times you were late or missed with your payments, and everything that has to do with your payment habits count.
Credit line usage. How you use your credit limit makes up the 30% of your credit score. The higher the usage of your credit limit, the lower your credit score is. Ideally, borrowers should not go beyond 30% of their available credit. If you own a low interest credit card, be careful not to maximize your credit line as this can damage your overall FICO score.
Length of credit history. 15% of your total FICO score is based on how long you have had credit. A longer record of credit history is of course more impressive especially if it shows timely payments all throughout. Be careful about closing your oldest accounts. Dont close your oldest credit cards just because they have high rates. The trick is to use them only for small purchases and pay off your balance in full always to avoid the interest rate.
New credit. Opening too many different accounts at once or in short period can pull down your credit score. Why is this? This gives a negative impression to lenders on why you need to apply for too many credit in that short span of time. Having too many inquiries made by the lenders whom you submit application to will also affect your credit score. If you are in the habit of sending credit card applications just to get the free shirt or the free cap upon signing up, stop now. Youre doing damage to your credit and thats not worth the freebie youre getting. Remember, new credit makes up 10% of your total credit score.
Types of credit used. The types of credit found in your credit report make up the other last 10% of your score. Having a variation of accounts in your credit report is definitely a good thing. For instance, aside from credit card accounts, having a mortgage, an auto loan and other credit in your account shows your capability in how you handle your obligations as a borrower.
No worry with no fax payday loans!
In an ideal credit crunch scenario, the best would be if one seeks monetary help in the form of payday loans. Obviously, as every one knows these loan products can be tricky deals hence, it is important to handle them with care. But then again, in situations like such, the only thing that remains on mind is to get bailed out of it as soon as possible. And for that matter, they don’t think twice before opting for no fax payday loans.
As it is quite clear by name, these loan products don’t involve any kind of faxing. Even the involvement of documentation and other legalities are also kept limited so that the borrowers doesn’t get annoyed. This cuts down on time-consumption factor and helps borrowers in getting the quoted loan amount quickly.
Another thing worth mentionable about no fax payday loans is the fact that they don’t invite borrowers to pledge asset for the sake of securing this loan help. Yes, as a loan applicant you don’t have to worry about arranging any collateral aka asset for getting this loan product. But bear one thing in mind, absence of collateral imparts an unsecured outlook to this loan product which automatically gives way for high APR (Annual Percentage Rate). Yes, although being secured against the paycheck of the borrower, the lenders make it a point to levy high APRs just to cover their backside in case if the borrower intentionally defaults in the repayment or runs away with the money. Of course, in a more polished language, it compensates for the risk element involved in the entire deal.
As far as securing this form of loan help is concerned, interested loan applicants can visit Online lenders in person or still better, browse through any price comparison website and compare no fax payday loans deals. This would not only help you in getting the best deal available in the market but would also be helpful for you as it will save your precious time and your hard-earned money. Meanwhile, you would also be able to bargain with the lenders and can also ask for certain favours such as waivers of fees, penalties, fines etc. on late payment of instalment and other things.
Hence, it would be better if one seeks to put a full-stop to all the financial problems with no fax payday loans.