From: C&L Value Advisors, LLC []

Sent: Monday, April 25, 2011 2:51 PM

To: Heidi E. Wisneski

Subject: Your Credit Score and What It Means


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C&L Value Advisors LLC





In This Issue

Score Interpretation

5 Parts to Credit Scores

Building Your Credit Score


Your Financial Health


Your credit history can determine whether you get a good job, a decent home, a deal on your cell phone and reasonable insurance rates.


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Credit scores are vital to your financial well-being.  You should know how they are calculated and how to keep them favorable.


Score Interpretation

The performance definition of the FICO (Fair Isaac Corporation), risk score is to predict the likelihood that a consumer will go 90 days past due or worse in the subsequent 24 months after the score has been calculated.  The higher the consumer's score, the less likely they will go 90 days past due. In general, a FICO score above 750 will almost guarantee an approval.  Anything between 700 and 749 will likely result in an approval, but interest rates may be elevated.  Anything between 650 and 699 could get you approved but your interest rates will be even higher.  Anything below 650, which is the current dividing line between prime and subprime (as of 2011), will likely get you declined.


A credit score is primarily based on credit report information, typically from one of the three major credit bureaus: Experian, TransUnion, and Equifax; all of which have developed their own proprietary scoring models.





There are 5 parts to your FICO Credit Scores


Payment History is about 35% of your score 


Have you paid your creditors on time? Late payments, bankruptcies, and other negative items can hurt your credit score.



How Much Your Owe is about 30% of your score


Your score is based on the amounts you owe on all your accounts, the number of accounts with balances, and how much of your available credit you are using. The more you owe compared to your credit limit, the lower your score will be. 


 Length Of Your Credit History is about 15% of your score


A longer credit history will increase your score. However, you can get a high score with a short credit history if the rest of your credit report shows responsible credit management.



New Credit is about 10% of your score


If you have recently applied for or opened new credit accounts, your credit score will weigh this fact against the rest of your credit history.  Do your rate shopping within a focused period of time, such as 30 days, to avoid lowering your FICO score.


Other Factors is about 10% of your score


Several minor factors can also influence your score.  For example. Having a mix of credit types on your credit report-credit cards, installment loans, and personal lines of credit-is normal for people with longer credit histories and can add slightly to their scores. 




Credit Report 101

A Simple Guide to Building your Score


Below is a model found on  It is a terrific visual aid for building a healthy credit report, establishing a good credit history and how to get back in track if life has derailed your credit score. 

 Credit Info Graphic





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