What Is A Credit Score?
What is a Credit Score? - In short, A Credit Score is a 3 digit number that represents to a lender your likelihood to repay a loan.
Does everyone have a Credit Score? - People who have borrowed money before or have been on an account with someone who has borrowed money will have a credit score if that account has been reported to any one or more of the 3 credit bureaus. The 3 credit bureaus that creditors report to are Transunion, Equifax, and Experian. An example of an account that may be reported could be student loans, and auto loan, a credit card. Even some property management companies report your rent payments to the credit bureaus.
How is the Credit Score number determined? - The credit bureaus use the data reported to them by creditors to determine your score. Because there are 3 credit bureaus, you should have 3 credit scores. Credit scores typically range from 300 to 850. Higher scores are better. There are a few different formulas that may be used to determine your score. The most widely accepted formula is called FICO, which stands for Fair Isaac corporation. FICO is the formula used by mortgage lenders.
How can I get a higher Credit Score? - Higher credit scores come from using credit responsibly.
Pay all of your bills on time.
Don't use more than 30% of available credit on any credit card or line of credit.
Don't close old accounts. You can pay them off, but keep them open. Use them occasionally but sparingly.
Pay any and all collections or past due accounts.
If you would like a copy of your credit report or want to check your credit scores, go to annualcreditreport.com.