The Science and Math Aspect
Creditology as we may refer to it, is the mathematical equations and algorithms utilized to produce a score from a compilation of huge amounts of data that is supposed to predict the tendency for a borrower to default on a loan. This ambiguous and often arbitrary rating system has kept many Americans in a state of helplessness, and allowed banks and insurance companies to charge higher fees and rates based on a number that often times makes no sense, and is actually incorrect. An extremely valuable industry has arisen, that is empowering the consumer to have control over this number, it is called creditology credit repair.
How does Creditology Credit Repair Work?
Quality credit industry professionals have access to software that runs mathematical equations similar to the credit bureaus equations, except in reverse, to determine the optimum levels of credit limits against balances, types of accounts to maintain as open, length of time to keep accounts open, etc.
What is a Credit Score?
A credit score is a number generated by a mathematical formula that is meant to predict credit worthiness. The most common of the credit score standards is the FICO score by Fair Isaac. The FICO score ranges from 350-850 and is intended as a predictor of whether or not you will be 90 days late on a loan obligation. Fair Isaac uses thousands of credit reports to calibrate the FICO scoring model and is very secretive of the exact formula.
Here is a percentage breakdown of a FICO score:
o 35% – Payment History
o 30% – Debt Ratio
o 15% – Length of Credit History
o 10% – Types of Credit
o 10% – Number of Credit Inquiries
It is very possible to remove negative items from your payment history through a credit restoration service, or even on your own, with the right guidance. Consumers can increase their credit history with positive rated accounts that will improve score. With a good credit restoration company, it can be determined the precise number of new accounts to open, with the exact credit limits and balances to maintain to optimize the score.
Most people are aware of the three credit reporting agencies TransUnion, Equifax and Experian. The average difference in score between the highest and lowest of your three FICO scores is 60 points. This is the result of each of the credit bureaus having different items on their report, some correct, some incorrect and some that are not being reported in full compliance with credit law.
According to the Government Accountability Office, 80-90% of credit reports have serious errors on them, and this does not even include the more minute errors that a quality credit restoration company looks for.
How can I get a free copy of my credit report?
By law, all consumers are entitled to a free copy of their credit report from each of the three credit bureaus once a year. However, this is merely a record of accounts on the credit report and a general reference to status, ie “good standing”. Specifics are not offered such as delinquent dates, and most importantly the actual score. For this information, the consumer must pay the bureaus approximately a $40 fee. The law that was supposed to help consumers monitor their credit has become nothing more than a bait and switch to entice consumers to get their “Free Credit Report”, only to realize the vital information is not free!
The bottom line is that there are very different versions of credit profile enhancement, including removing reporting of negative accounts, where possible, removal of erroneous reporting, and frivolous reporting by creditors, as well as the mathematical dynamics behind creditology credit repair. The consumer must utilize a company that has ALL of the resources necessary to optimize all aspects of the credit profile, not just mail out dispute letters.