Control Your Credit, Protect Your Future
- Credit Reports
- What is a Credit Report?
- What is a 3 in 1 Credit Report?
- Checking your Credit Report
- Credit Report Errors
- What is a Credit Bureau?
- What types of Credit Reports are there?
- Who can access my Credit Report?
- What info is on a Credit Report?
- Do all bureaus have the same information?
- Credit Report Glossary
- Credit Scores
- What is a Credit Score?
- Average Credit Scores by State
- How to improve my credit score?
- What affects my credit score?
- How do I get my credit score?
Credit Scores
What is a credit score?
A credit score is a number that represents your calculated measure of credit risk. Your credit score is the result of a complex mathematical formula that takes into account numerous factors in your credit history. Put simply, your credit report is scored against millions of other people's credit reports, generating your consumer credit score. Your credit score is very important because it can determine your financial future. More specifically, your credit rating can affect whether or not you can obtain
- A mortgage
- A car loan
- A credit card
- A school loan
A lender may also use your credit score to calculate the rate you get for a loan; the lower your consumer credit score, the higher the interest rate you'll be charged. So over time, a good credit score can save you lots of money. Lenders look at your credit score report as a prediction of how likely you are to make your payments and make them on time.
In addition, potential employers may do a credit check for employment to determine whether you're financially responsible. And landlords often do a credit check for renters.
Factors affecting your credit score
- Your bill paying: whether you pay your bills on time, have ever been contacted by a collection agency, or whether or not you've declared bankruptcy.
- The amount of money you owe: the more money you owe, the lower your score.
- The length of your credit history: the longer you've been establishing credit, the higher your credit score.
- The combination of your credit: the richer your variety of credit, meaning the more ways you spread out your credit (through cards, mortgages, car loans, etc.), the higher your credit score.
Credit scores have done a lot for borrowers. Lenders used to come up with their own criteria for calculating interest rates - now borrowers with good credit (and therefore, good credit scores) get rewarded for financial responsibility with lower interest rates.
Credit Score Ranges
Most credit scores range from 300 to 900, with the majority of people in the 600 to 800 range. To get the most favorable interest rates, you'll need a score of 720 or higher. In terms of interest rates, on average, a person with a credit score of 520 will get interest rates on loans that are three to four percentage points higher than rates given to a person with a credit score of 720.
Factors that can damage your credit report include late payments, an absence of credit references, and unfavorable credit card use.
The first step to improving your credit score is finding out what it is. Then you can take the necessary steps toward a better credit score.
For more information on how to check your credit report, or how to instantly get your 3 in 1 credit report, FREE credit score, and identity theft insurance, go to www.CreditReport.com now!
Related Articles
- Why 3-in-1 Credit Reports Make Sense
- Credit Reports and Credit Scores – What’s the Difference?
- Credit Report and Home Buying – What You Need to Know
- Credit Report and Automobile Buying – What You Need to Know
- Credit Report and Boat Buying – What You Need to Know
- Credit Report and Renting an Apartment – What You Need to Know
- What Is Your Credit Score and How Is It Computed?
- How Major Life Events Impact Your Credit
- Why You Should Establish a Good Credit History As Soon As Possible
- The Art of Getting Credit
