Credit Repair FAQ’s

by : Francis Achebe

Looking for a home loan and are finding that bad credit is an issue? Take a look below, an industry specialist has some advice for you, if you need a copy of your credit reports and scores get them here.

What is a trade line? 

According to a trade line is an “entry by a credit grantor to a consumer’s credit history maintained by a credit reporting agency”. The trade line describes the consumer’s account status and activity. Trade line information includes names of companies where the applicant has accounts, dates accounts were open, credit limits, types of accounts, balances owed and payment history.

Installment vs. Revolving Debt and which one has a larger impact on your credit score:

According to a senior contributor of the FICO forums at “Installment loans do have balance-to-original loan amount ratios which affect your score. However, it does not effect as much as credit card utilization percentages.” You will save money paying off your higher rate interest installment loans, but it won’t do anything for your credit score. Depending upon where you end up on your revolving utilization number of accounts with balances…scores will improve by paying down your revolving lines of credit quickest.

How a Fico Score breaks down:

The Fico Score is calculated from several different pieces of credit data in your credit report. This data is grouped into five categories as outlined below. The percentages in the chart reflect how important each of the categories is in determining how your fico score is calculated your fico considers both positive and negative information in your credit report. Late payments will lower your FICO Score, but establishing or re-establishing a good line of credit and making payments on time will raise your score.

Payment History 35%

First Thing a lender wants to know is whether you’ve paid past creditors on time. This is one of the most important factors on a credit score.


Amounts Owed 30%

Having accounts and owing money on them does not necessarily mean you are a high risk borrower with a low credit score.


Length of Credit History 15%

​In general a longer credit history will increase your FICO credit score. However, even people who haven’t been using credit may have a high FICO Score, depending on how the rest of their credit report looks.

Your Fico Score takes into account:


  • How long your credit accounts have been established, including the age of your oldest account, the age of yo​ur newest account and an average age of all other accounts
  • How long specific credit accounts have been established
  • How long it’s been since you’ve used certain accounts

Types of Credit in Use 10%

​The score will consider your mix of credit cards, retail accounts, installment loans, finance company lines of credit and mortgage loans.

Defining Revolving vs. Installment Debt is a must:

According to Investopedia installment debt is “Debt issued with the condition of regularly occurring intervals for payments by the debtor, until the principal and interest are paid in full.” Whereas, revolving debt according to Lendi​ngTree is “Revolving debt typically has a variable interest rate, an open ended term and payments that are based on a percentage of the balance.” In a nutshell installments are car notes, mortgages and home equity loans and revolving debt include credit cards, store credit cards and lines of credit.

New Credit 10%

Research shows that opening several lines of credit in a short period of time represents a greater risk — especially for those who don’t have a long credit history.


Both credit repair and adding trade lines for credit enhancement have the same effect… increasing your credit score. Adding lines of credit to a credit report is much simpler then removing negative items, which is why you have probably been struggling to increase your score. But, how do adding trade lines help your credit score?  Well, the trick is to add a seasoned trade line, that is, a line of credit with a history of on time payments and a low debt to credit ratio. Once the trade line has reported to your credit file, ​ the effect on your credit score is immediate, as the new account characteristics positively adjust calculation of your score produced by FICO®. While there are many scores developed by many different companies, a large majority of lenders use FICO® score, which is made up of 40% revolving credit accounts; therefore, our trade lines positively affect 40% of your credit score.