Credit Repair 30
Your Resource For Better Credit

How Credit Scores Are Calculated For Credit Repair

by | Apr 1, 2024 | News

Credit scores are determined by a variety of factors and though credit repair companies cannot directly alter these scores, they can collaborate with individuals to enhance their creditworthiness gradually. Here is a general overview of how credit scores are computed and the potential role of credit repair:

1. Payment History (35%): This stands as the most crucial element in determining your credit score, evaluating whether you have been timely in paying your bills. Credit repair involves ensuring prompt bill payments and addressing any overdue accounts.

2. Credit Utilization (30%): This factor assesses how much of your available credit you are utilizing. Credit repair strategies may involve reducing credit card balances and overall credit utilization.

3. Length of Credit History (15%): A longer credit history reflects better on your creditworthiness. While credit repair may not directly affect this factor, it can provide guidance on maintaining and cultivating a positive credit history over time.

4. New Credit (10%): Opening multiple new credit accounts within a short timeframe can suggest financial strain and potentially lower your credit score. Credit repair services often recommend avoiding unnecessary credit inquiries and opening new accounts unless absolutely necessary.

5. Credit Mix (10%): When it comes to credit mix, lenders prefer to see a variety of credit types like credit cards, mortgages and installment loans. Credit repair services may advise diversifying your credit types if it makes sense for your situation.

Credit repair agencies typically collaborate with individuals to review their credit reports, spot any errors or inaccuracies and challenge them with the credit bureaus. They may also offer advice on improving credit habits, negotiating with creditors and creating strategies to enhance credit scores gradually.

It’s crucial to understand that credit repair is a gradual process that requires time before significant improvements are noticeable in your scores. Moreover, individuals should exercise caution when dealing with any company that promises instant results or demands excessively high fees upfront for their services, as these could be signs of potential scams.