Your Credit Score
Credit scores: all lenders use credit scores to determine interest rates and credit limits.
The credit scoring system was developed in the early 1950's. However, it was not widely utilized until the early 1980's, when it was overhauled by Fair, Isaac & Company. At that time the 3 major credit reporting bureaus, Equifax, Experian and Trans Union, worked with FICO to create three separate credit models, one for each bureau.These agencies still use their own criteria to rate credit holders but the numbers have been normalized so that a score of 650 at Bureau A is equal to a score of 650 at Bureau B, etc.
Simply put, a credit score is a mathematical equation calculated by the review of a potential applicants credit history. It is based on factors such as income, instances of late or missed payments, types of debt owed, number of credit inquiries on file and the percentage of available credit that is actually being used.
Credit scores generally range between 300 and 800. The average credit score lies somewhere between the 600 and 700 range. As a rule, in order to receive a standard, lower cost loan a score of 620 or above is required. A high score indicates a low credit risk, meaning those with high scores find it very easy to obtain credit.
It is important that credit issuing companies indicate a credit holder's limit on their credit report. Failure to do so will usually result in a lower credit score. This is due to the fact that most scoring models plug in the highest balance from another listed account, when a credit limit is missing. This is an action which causes it to look as though a greater percentage of an individuals total available credit is actually being used. To avoid this type of situation, deal only with lenders who include this specific piece of information in their bureau reports.
There is a law which requires each of the three major credit bureaus to provide you with a no-cost credit report, once a year, should you request it. There is no such law pertaining to credit scores. Credit bureaus are allowed to charge consumers a "fair and reasonable" fee, for them.
There is an exception to the law above. Consumers are eligible for a no-cost credit score when applying for any type of home loan. As long as the mortgage lender uses a credit score when making an approval determination, he or she must supply that information to each applicant who requests it.
The questions you should be asking.
1: How do I order my free report?
2: What information do I have to provide to get my free report?
3: Are there other situations where I might be eligible for a free report?
4: What is a credit score, and how does it affect my ability to get credit?
For the answers to these and many more questions visit www.usacreditinfo.com
Cornelius P Crumpacker
http://www.usacreditinfo.com
MORE RESOURCES:
 |
|
|
RELATED ARTICLES
What Does Your Credit Say About You?
A credit report is more than just a snapshot of your financial picture; it can assist credit grantors in determining your overall risk factor. Additionally, lenders, credit grantors, and even human resource departments often use it as a tool to determine a person's character.
Good vs. Bad Credit Debt
Do you know the difference between good and bad credit debt? Most everyone seems to think that all debt is bad, but that is not always the case. In fact, there are some instances where good debt can actually help your financial situation.
Saving Money: Quick Cash, High Cost
I didn't think it was possible. But it is.
How to Improve Your Credit Rating
So you got into debt, had problems but you got yourself back on your feet through hard work and sacrifice and how are you rewarded? A Bad Credit Rating.You would be forgiven for thinking thats not fair and why did you bother sorting yourself out if your hands are still tied when it comes to applying for anything financial? There are ways to improve your credit rating and get back on track completely.
10 Signs You May Need Credit Counseling
Debt management programs can be of real help for people that discover they cannot face their debts. At first, they will attempt to solve the situation all by themselves by cutting down on spending and keeping a close eye on accounts.
Automobile Credit Report
When applying for a loan to purchase a car, the lender will want to take a look at a person's auto credit report. Credit reports tell lenders all they need to know about granting a loan to all applicants.
Low Interest Credit Cards Have Many Advantages
When credit cards are used wisely they can be very beneficial to the consumer. A low interest credit card can be exceptionally beneficial.
Cash Advance - How Does It Work?
If you want a cash advance or a payday/paycheck loan, you usually get a personal check. Some companies use your bank account or credit card in addition to or instead of a check.
Looking for that Low interest Credit Card?
If you have been shopping around for a Low Interest Credit Card you will notice that the UK market is awash with Credit Card companies offering low rates to entice you to apply for their Cards.There has never been a better time to consolidate your credit cards and get a far better interest rate.
Building A Credit Report Lenders Will Love You For
Will lenders really love you for having a good credit report score? Love is not the right word of course; lenders are after your money, and never forget that. But the lender's representative will love dealing with your credit application if your credit report is good.
The Three Largest Factors In Your Interest Rate
There are three major factors that affect how much you pay for a loan. Understanding these factors can save you time, money and frustration.
Are You The Only One Using Your Name?
Identity theft has become an epidemic. Millions and millions of purses and wallets are stolen everyday and many of them are not just taken for the money inside.
Online Credit Report and Online Credit Reports
Online credit reports are easily accessible to those interested in viewing them. If you have wondered about what kind of credit score you have, you can go on the Internet and look at your online credit report.
How Do I Establish A Good Line of Credit?
A line of credit, roughly defined, is the amount of credit that can be given to a borrower from a lender. Usually a contract or note of promissory is exchanged between the two parties, in which both parties agree to the line of credit amount, as well as the annual interest due to the lender at the end of the term.
What is Credit Repair and How Can It Help You?
There are millions of consumer credit reports on file from mainly three major reporting bureaus which include Trans Union, Experian, and Equifax. These credit gathering agencies store huge amounts of data about every person that takes out a loan, credit card, or any other line of credit.
What Are The Most Common Credit Card Mistakes?
Now in a world with so many easy to get credit cards it can be easy for someone who is a first time credit card holder, or even someone who has several credit cards in the past to make mistakes when using the card.One of the most common mistakes when using credit cards is to use the credit card to make purchases of things you are not really able to afford.
Recognizing the Signs that You Might Need Credit Counseling
Most families in America today have a credit card; some have two or more. The type of credit card you own, gold, platinum, ext, is almost a status symbol in society.
5 Surefire Ways To Eliminate Credit Card Debt
Do you have enormous credit card debt? You are certainly not alone. According to research, the average family in the United States has $7000 in credit card debt and pays about $1000 in interest each year! Throw in a late payment or two, or an over-the-limit charge, and that number skyrockets.
The Hazards Of Your First Credit Card
You probably don't need me to tell you credit cards are easy to get a hold of; at least, that is so in the US and UK. How many weeks pass without a glossy brochure promoting a credit card popping through your letter box? And that's just your mail; the tv advertising budgets for credit card promotion are enormous, with some famous faces often adorning your screen, smiling beautifully as they tempt you.
Tips for Choosing a Credit Card Company
Credit Cards are essential for any consumer today. However, when choosing a new credit card company, many people do not know what to look for.
|