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The Five Secrets That You Shouldn’t Know About Experian Transunion | experian transunion

Experian TransUnion is perhaps one of the three major credit bureaus in America. It calculates your credit score and the other two report your credit history to Experian and TransUnion. Experian is the market leader but both bureaus are very important when it comes to calculating your FICO score. Here's how your credit history is calculated:

Your payment history, or frequency of making payments, is recorded by the credit agency as being good if it's a balance transfer (going from one account to another) and being bad if you just continue making your payments late. Payment history is reported monthly, quarterly, etc. When lenders pull your credit they look for good payment history. Lenders use this information to calculate your FICO score. This formula is not publicized, but it is a good rule of thumb. It is estimated that about 70% of all credit applications are rejected because of mistakes made on the application.

Credit inquiries affect your score negatively. Every time you apply for credit, lenders add an inquiry to your report. If the inquiry is for a credit card, the lender marks that as an inquiry. Each time you make a bill payment, your creditors report the payment as being made on time. The formula for calculating your FICO score for each type of inquiry is different, but each inquiry has an impact.

Another factor that lenders consider when computing for your credit is whether or not you have any open accounts. Open accounts are reported when lenders check your credit. Most often this is because the lender is suspicious of you. They may want to check up on you before approving a loan to secure their money. They don't have proof, but sometimes they will consider an open account as a sign that you might default on a loan, which is what they want to avoid.

There are certain circumstances that can lower your FICO score. For instance, if you have charged off more than one credit account in the past seven years, the report will show that. Also, having delinquent accounts on your credit report lowers your score. Also having accounts in collections is bad. Finally, having a bankruptcy on your report will have an adverse affect. Your lenders know about bankruptcies, and any bankruptcy will stay on your credit history for seven years.

Experian credit score is a good way to judge how responsible you are. Lenders look at your debt to income ratio. It is a good measure of your ability to handle credit responsibly. If you don't have too many outstanding accounts, lenders would see you as responsible with your payments, and thus a safe prospect.

But if you do have lots of accounts and a lot of late payments, lenders will see you as a greater risk. This is where a negative Experian credit score comes into play. Negative scores mean you may be a high risk to offer credit. Lenders will be more cautious with you. In fact, many companies won't even loan you money at all.

Getting your credit score from Experian is important, but it's only one aspect of the equation. To improve your score, you need to make all of your payments on time, keep your balances low on new accounts, and avoid being in collections. By avoiding negative situations, you can help your credit score to climb.

The credit bureaus also keep records of your payment history. So if you've been sending in a regular payment to one or several of your accounts, those reports should be accurate. If not, contact the credit bureau and dispute the listing. Be prepared to provide evidence that the payment is a recent one. In short, if you don't have to worry about late payments or other negative situations, your Experian credit score will reflect that.

There are other things that affect your credit score besides whether you paid your bills on time. For instance, you may be considered a high risk if you've applied for loans or credit cards in the past year. Credit bureaus and lenders pull your credit record when they determine whether or not you are a good candidate for loans. So if you have several collections, or recent inquiries on your credit report, your credit score may drop. It's important to dispute inaccurate listings as quickly as possible to avoid further damage to your rating.

While it's always best to do what you can to improve your credit standing, it sometimes makes sense to go with the bad credit option. After all, it's easier to make minimum payments on time than it is to repair your credit score. If you can't afford to make extra payments each month, then consider paying your balances off at once. If you're able to do this, you'll lower your debt by at least 60%, which will boost your credit score significantly. Also, don't forget that you have to pay off the loan and not just the balance of it!

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