I will be honest, after the past 18 months of listening to the word credit thrown around by every “expert” that opens their mouth or writes a sentence, I have had about enough of it. Are we in a “credit crunch?” Is credit really that important to our economy? To be honest, I just want to pay my bills and go a good vacation this week and I do not really care.
It is hard to believe that an intangible concept determined by some group that does not even know your name can have such a huge impact on your life. In fact, it is quite creepy.
The first thing to you have to do to restore your credit is research and understand what exactly goes into computer your credit score. You will be running around in circles and wasting your effort if you do not.
Basically, your credit score is a number (calculated differently by different companies) that is calculated by a mathematical algorithm. It is important to realize that credit is a numbers game. It does not factor in the human circumstances; such as job loss, natural disasters, health problems etc., that in reality truly effect a persons financial situation.
So, the trick is to put emotions and circumstances aside and evaluate your financial situation objectively and numerically. If you understand how your credit score and credit is calculated and determined, then you will have leverage in the system.
First of all, there is a difference in a credit score and a credit report. Everyone is entitled to a free credit report every year, but not their credit score.
Would you be surprised to know that there are only 5 factors that are involved in determining your credit score? Would you be surprised to learn that income was not one of them? If you want to read about all of them, please visit my website.
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