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6: Credit Score
Your Credit Score is a numerical representation of your credit worthiness that is used by most lenders and credit card issuers. Remember, Experian, Equifax and TransUnion each have their own set of credit data about you, which is why Credit Scores may vary between them.
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Percentile: Your credit rating ranks higher than 81% of U.S. consumers.
What factors RAISE your PLUS Score:
You´ve paid your bills on time and currently do not have any overdue accounts or derogatory information, such as a collection, charge-off, or bankruptcy, on your report. You can be proud of the fact that you are building a good credit score, so continue with the positive credit behavior!
Your average credit limit for your major credit cards, such as VISA or MasterCard, is high. This tells lenders that you have enough financial experience and will be more likely to see you as a good credit risk. Keep paying all your bills on time and work toward minimizing your outstanding balance and you should have no trouble obtaining high credit limits on future credit accounts.
What factors LOWER your PLUS Score:
Each time a potential lender or landlord pulls your credit report for review, an inquiry is placed on your file. Having too many inquiries to your credit report is negatively affecting your score. Inquiries stay on your credit report for up to two years, but they are not necessarily negative information. However, too many inquiries may indicate to lenders that you are trying to take on more new debt. Try to keep your inquiries to a minimum and apply for new credit sparingly.
Your overall balances are close to your overall credit limits, which may be lowering your score. Having high credit limits shows lenders that you are responsible with your credit, but you should increase the cushion between your debt and your limits by paying down your balances so lenders don't perceive you as getting in more debt than you can handle. This may help improve your credit score.
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Help?
About Your PLUS Score:
The PLUS Score, with scores ranging from 330 to 830, is a user-friendly credit score model developed by Experian to help you see and understand how lenders view your credit worthiness. It is not used by lenders, but it is indicative of your overall credit risk. Higher scores represent a greater likelihood that you´ll pay back your debts so you are viewed as being a lower credit risk to lenders. A lower score indicates to lenders that you may be a higher credit risk.
There are three different major credit reporting agencies, Experian, TransUnion, and Equifax that maintain a record of your credit history known as your credit file. Your Credit Score is based on the information in your credit file at the time it is requested. Your credit file information can vary from agency to agency because some lenders report your credit history to only one or two of the agencies. So your credit score can vary if the information they have on file for you is different. And since the information in your file can change over time, your Credit Score may be different from day-to-day.
Lenders and insurers use several different credit scoring models so don't be surprised if your lender gives you a score that´s different from the PLUS Score you receive online. Just remember that your associated risk level is generally the same even if the number is not. If the lender´s score is lower than your online score, it is possible that this difference can lead to higher interest rates and sometimes credit denial.
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