
When applying for a credit card, mortgage, or other loan, it’s important to understand what lenders will look at before approving your application. Generally, lenders will consider your FICO credit score. If you’re unsure how this score is calculated or what factors influence your rating, you’ll want to keep reading. Additionally, if you believe there is an error with your credit score, you’ll learn how a California credit report lawyer can help guide you through these difficult times.
What Is the FICO Credit Scoring System?
As a consumer, your financial decisions, both positive and negative, will impact your financial future. Every payment you make, loan you borrow, and line of credit you take out will reflect via your credit score. This score lets creditors know whether or not you would be a risk to lend to, so it’s important to understand the factors that can impact your score.
The FICO credit score, developed by the Fair Isaacs Corporation, is the most widely used system for evaluating creditor risks. While the exact formula used by this company to calculate consumer credit scores is not known, the different factors that impact consumer scores and how much they make up a credit score are as follows:
- Payment history (35%)
- Outstanding amounts (30%)
- Credit history (15%)
- New lines of credit (10%)
- Credit mix (10%)
When credit furnishers send the three major reporting agencies your information, the agency will plug these details into the FICO system, which will produce a credit score ranging from 300 to 850. The higher your score is, the less risky you are to lenders, as it shows that you make consistent payments and have not accumulated too much debt.
What Can I Do if My Score is Wrong?
If you have reason to believe your credit score is incorrect, it’s imperative to understand your legal options. Typically, the first thing you should do is connect with an attorney. Though you legally do not need the guidance of a lawyer for these matters, it’s in your best interest to have legal representation, as this increases your chances of receiving a more favorable outcome.
To file a dispute, the first thing you’ll need to do is obtain a copy of your credit report to spring and highlight the section that is incorrect. Next, you’ll attach any evidence you’ve gathered to help support your claims and submit it to the credit reporting agency. After you’ve submitted the dispute, the agency will have 30 days to investigate and issue a formal response to the claim.
Unfortunately, disputing credit information can be incredibly difficult, so it’s in your best interest to connect with an experienced credit reporting attorney from Loker Law. Our team understands how complicated these matters can be, which is why we will do everything possible to assist you during these complicated times. When you need help, our firm is here. Contact us today for more information.