Silicon Valley Credit Repair

Your credit is our priority!

your credit is your credibility

 

What's a good credit score?

A healthy credit score is imperative for your financial success. Your credit score is a three digit number that may vary from bureau to bureau where they calculate the number from your data-rich credit report and is one of many factors used by lending institutions to determine your creditworthiness for a mortgage, loan or credit card. Your credit score will have a positive or negative impact on whether or not you are approved for the loan, as well as what interest rate you are qualified for. A healthy credit score range is considered to be 720 to 850. Lending institutions, banks, etc. can have various standards for what they consider to be a healthy credit score, so it's important to keep raising your credit score so you may obtain the lowest interest rates and qualify for all the high end perks/giveaways.

 

FICO® Score Calculation

FICO® scores are calculated from a lot of different credit data in your credit report. This data can be grouped into five categories as outlined to the left. The percentages in the chart reflect how important each of the categories is in determining your FICO® score. 

These percentages are based on the importance of the five categories for the general population. For particular groups—for example, people who have not been using credit long—the importance of these categories may be somewhat different and severely impact the potential increase in their overall FICO® score.


 

How long does information stay on my credit report?

Any good information will stay on your report indefinitely. However, if you do not use the account, the information will cycle off every 7 years. A closed account will still stay on your credit report for 7 years. Most negative information stays on your report for 7 years from the date it was paid or charged off. Bankruptcies and Public Records stay on for 10 years. Most inquiries will stay for up to 2 years.

 

Payment History

Any late payments or current payments show up here. If you plan to pay off a collection, judgment or tax lien account, it will actually lower your score in the short term.  This is an important topic our credit experts will discuss with you to educate you on the importance of what to pay off, how to pay off and when. 

 

Outstanding Debt

Outstanding debt is the total amount owed divided by your credit limit. This is your "total percentage of availability." The higher this availability is, the higher your credit score will be. It is important to maintain at least 3 active revolving credit accounts because that is where your FICO® score is generating points from. Often times, lenders require 3 trade lines with at least one that has a $2,000 limit. This category accounts for a whopping 30% of your score! When it comes to calculating your ideal outstanding debt, your goal is to stay at 30% or below of your total credit limit. Simply stated, if you have a credit card with a $1,000 limit you don't want to ever carry a balance over $300. By following this method, you increase your credit score. 

 

Credit History

This relates to the age of your accounts. The older the account, the better it is to use. DO NOT close any revolving accounts especially during any home loan process or major purchase. This may drop your credit score. This category accounts for 15% of your credit scores.

 

New Credit

Applications for new credit account for 10% of your score. Try to keep your accounts to a maximum of 4 major credit cards (VISA, MasterCard, Discover, etc.). During a mortgage loan process, DO NOT apply for credit cards, furniture store or electronic store credit offers that have better-than-usual terms. If anything, wait until the close of escrow to do these things. Your lender will pull your credit again days before close of escrow to finalize the funding of your loan and to close the deal. Applying for anything new or running your credit elsewhere will have a negative impact on your score and may cost you your loan. 

 

What is Excellent Credit?

Having a variety of accounts in good standing such as a mortgage, car loan and 4 credit card accounts will generate a healthy overall credit score and place you on the high end of the credit score scale. This accounts for 10% of your credit score.

 
 

CONTACT

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LOCATION

7660 Monterey Street, Suite 202
Gilroy, CA | 95020

Monday—Friday | 9am-5pm (PST)

To schedule an appointment or have any question, call us at
408.337.8620 | 1.888.720.9878

 
 

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