Credit & Credit Scores
The more you understand about your credit and how your actions impact the score the better prepared you will be to improve and keep your credit score at a level that lenders will give you the best rate and the loan amounts you desire.
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Credit Score
Your credit score is a unique score that credit bureaus calculate from all the information that is on your credit report.
- The most common score is the FICO score and the scale is from 350 – 850. Over 800 is considered excellent. If your score is below 600 your ability to obtain loans might be hindered.
- Lenders use scores because it provides a quick understanding of your level of risk or in other terms, your likelihood of paying your loans and other bills.
- The most important ways to improve you credit score are to establish credit, avoid having any late payments over 30 days, and make sure you don’t max out your credit card limits.
Credit Report
Your credit report contains all of the information that the credit reporting agencies collect on you from lenders, companies and other sources of your payment history.
- Credit agencies determine your score based on a myriad of factors. The major factors include: payment history, amount of debt, age of accounts, account mix, and history of applying for credit.
- Lenders and other sources report this information regularly to credit reporting agencies.
- You are entitled to one free report each year.
- This is the information that is used to calculate your credit score.
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