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There is a lot of information about your credit. But what exactly does your credit mean? In this article I will discuss three categories. The first is your credit score, the second will be your credit report, and the third will be your full credit report with all 3 scores.
Your credit score is so important these days that in order to get a job, you better manage your credit score correctly. Most institutions now see your score as an idea of how responsible a person can be. Your credit score generally ranges from 380 to extremely bad; to 820 being the best. All offices have a scoring system that dictates your creditworthiness. Whether you have revolving credit or installment loans, everything determines your creditworthiness with all three agencies. Your credit score could go down if you charge your credit cards more than 30% of your credit line. Your credit score will go down if you close on good credit, which has no balance due. If you are late for an obligation, your Credit Score will suffer a reduction of 20 points, which by the way is an extremely large drop. This kind of drop could mean the difference between getting the best interest rate on a mortgage or even landing the new job you worked so hard for. Each of the Offices and there are three, Experian, Equifax and Trans Union, all rate your Credit according to your Credit History. Your credit score is so important these days that you need to know what it is with all three bureaus.
Your credit report is what all institutions look at when it comes to applying for a dollar, credit card, mortgage, insurance, or even a job. As a consumer, you need to know what is on your credit report. When accessing your Credeit Report, you must ensure that you access a Tri Merge Report from all three Offices and with all three scores. This is what most people look at. If you are going to get your credit report, this is exactly what you need. You need to know what they are looking at. annualcreditreport.com offers a credit report, but what they don’t mention is that it doesn’t get your scores. Your credit report is useless if you don’t get your credit scores from all three agencies. Your credit report will show what all of your creditors have to say about you regarding your record on all of your obligations involving borrowed money. It will give you a snapshot of the last 7 years. So make sure you pay everything on time and don’t allow anything to get charged.
Your credit scores:
Credit rating software is somewhat similar, but there are different names for each of the agencies.
For example:
Equifax is “Beacon”
Trans Union is FICO Classic
Experian is the FICO risk model
The overall scoring range for these models is as such:
o 780-850 – Low Risk
o 740-780 – Medium low risk
o 690-740- Medium risk
o 620-690- Medium high risk
or 620 and under: high risk or “subprime.”
Like any top-notch recipe, the precise formula used to calculate various types of credit scores for credit reports are well-kept trade secrets. However, Fair Isaac has published enough information to give very general ideas on how scores are calculated.
Remember that the score is calculated by looking at all the credit information in the credit report and the various factors that make up the whole. No single data or factor determines your credit score by itself.
Factor 1: Payment history (35%)
Factor 2: Amount owed —– Extent of indebtedness (30%)
Factor 3: Length of credit history ——- The longer the better (15%)
Factor 4: How much new credit? (10%)
Factor 5: Type of credit (10%)
Having said all this, head over to the nation’s premier resource for your Credit Report, http://www.my720fico.com, this resource was created by lenders who understand the need for correct information.
http://www.my720fico.com is your one-stop resource for credit reports and credit scores.