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There is a lot of information available regarding your credit. But what exactly does your credit mean? In this article I will discuss three categories. First is your credit score, second is your credit report, and third is your complete credit report with all 3 scores.
Your credit score is so important these days, that just to get a job, you need to manage your credit score properly. Most of the institutes now look at your score as a glimpse of how responsible a person you can be. Your credit score usually ranges from 380 to very poor; 820 being the best. All bureaus have a scoring system that determines your credit worthiness. Whether you have revolving credit, or an installment loan, determines your creditworthiness with all three bureaus. If you charge more than 30% of your credit line on your credit card, your credit score may drop. If you close good credit with no outstanding balance, your credit score will drop. If you are late with an obligation, your credit score will typically drop by 20 points, which is a huge drop. Such a decline could mean the difference between getting the best rate on a mortgage, or even how hard you worked to get a new job. Each bureau and there are three, Experian, Equifax and Trans Union, all score your credit based on your credit history. Your credit score is so important these days that you need to know what it is with all three bureaus.
All institutions look at your credit report when applying for a loan, credit card, mortgage, insurance, or even a job. As a consumer, you need to know what’s on your credit report. When accessing your credit report, you need to make sure that you access a tri merge report from all three bureaus, and with all three of your scores. Mostly everyone has this vision. This is what you need if you are going to get your credit report. You need to know what they are looking for. AnnualCreditReport.com provides a credit report, but they fail to mention that you don’t get your scores. If you do not get your credit score from all three bureaus then your credit report is worthless. Your credit report will tell you what all your creditors have to say about your history with respect to all your obligations, including borrowed money. This will give a snap shot for the last 7 years. So make sure you pay everything on time, and don’t allow anything to go into collections.
Your Credit Score:
Credit scoring software is somewhat similar, but has different names for each agency.
For example:
Equifax is “the beacon”
Trans Union is FICO Classic
Experiential FICO Risk Model
The typical scoring ranges for these models are as follows:
o 780-850 – low risk
o 740-780 – medium – low risk
o 690-740- Medium Risk
o 620-690 – medium high risk
o 620 and below – high risk or “sub-prime.”
Like any top recipe, the exact formulas used to calculate the different types of credit scores for credit reports are well-guarded trade secrets. Nevertheless, Fair Isaac has released enough information to give a very general idea of how the scores are calculated.
Remember that the score is calculated by analyzing the entire credit information in the credit report and the various factors that make up the whole. No one information or factor by itself determines your credit score.
Factor 1: Payment History (35%)
Factor 2: Outstanding Amount —– Indebtedness Limit (30%)
Factor 3: Length of credit history ——- The longer the better (15%)
Factor 4: How much new loan? (10%)
Factor 5: Type of Credit (10%)
All that being said, visit the country’s top resource for your credit report, http://www.my720fico.com This resource was created by lenders who understand the need for accurate information.
http://www.my720fico.com Your one stop resource for credit reports and credit scores.
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