Credit Scoring

All US consumers are eligible to retrieve one free credit report
Per year and the three credit reporting companies have set up a
central web site (www.annualcreditreport.com) to allow
Americans to obtain this information. You may be
shocked to find who is peeking at your credit. Credit scoring is
now used in court houses, work places, and rental offices, with
3−digit numbers being used to assess one's character. Utility,
cable, and cell phone providers also check your credit. Auto and
property insurance companies calculate their internal insurance
scores from a credit report, paying specific attention to debt and
derogatory marks. This is due to the fact that statistically, people
with poor credit file more claims. One little−known fact about
credit scoring is that 30% of the score is calculated based on
existing debt versus available credit. This category is nearly as
important as the amount of delinquencies one has, which weighs
in as having a 35% impact on the overall score. For this reason,
it is not prudent for a consumer to close credit card accounts.
Such action reduces the amount of available credit and increases
the ratio of debt−to−available credit.