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a reduced interest rate. Oftentimes, you can receive a lower rate, which will in turn reduce your minimum payment.

In order to prepare a detailed credit repair plan, it is helpful to understand how a credit, or FICO, score is calculated. The details of the FICO score calculation are a closely guarded trade secret. However, there is some information that has been made available to the public. Understanding this information will help formulate an effective plan.

The FICO score is determined based on five criteria:

1. Payment history (35%) Creditors report payment delinquencies of greater than 30 days. The more delinquent, the more adversely the credit scored is affected. Accounts referred to collections are worse than late payments, and bankruptcies are the worst items of all.

2. Amount of credit (30%) There are two primary factors here: the amount of credit available to you and the percentage of available credit you are currently using. Low balances are preferable. Excessive credit lines are not.

3. Length of credit history (15%) The longer you have had a credit history, and the longer you have maintained individual accounts, the better off you are.

4. Mix of credit (10%) This part of the score is a function of what types of credit and how many of each type you have. Installment loans do not hurt you. A few credit cards are OK, but more than four can hurt your score. Finance loans are the least desirable type of credit. A strong score in this area will typically reflect a healthy mix.

5. New credit applications (10%) This section is an assessment of risk due to recent attempts to obtain new credit. The formula does account for shopping for rates, if, for example multiple mortgage lenders process applications in the space of 30 days. Overall, the more recent the inquiries, the lower your score.

Comprehension of these factors is an important step in preparing a credit repair plan of attack for. The biggest benefit is derived simply from paying bills on time. Your credit report tracks 30, 60, and 90 day delinquencies. In order to improve this part of your score, you need to stay "clean". You should not expect to see any improvement in this part of your score before 6 months of on-time payments on all accounts.

The final step in reducing your credit score, and thereby effecting a repair of your credit, is to lower your outstanding balances, particularly for credit cards and finance loans. This step can take time, but it does have an avalanche effect, allowing you to reduce

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