How is Your Credit Score Measured?
There is no denying that in today's society you credit score is a very important number. It is the measure by which lenders determine how likely you are to pay back any money that they lend you. The thinking is that you responsible you have handled credit in the past is an indication of how responsible you are likely to be in the future.
Your credit history is tabulated by three main reporting agencies. They collect and organize information regarding late payments and outstanding balances and put them into the form of a report. Then when you apply for credit, the lender can review your past behavior and make an informed decision as to whether or not to approve your request.
You are able to obtain a free copy of your credit report once a year. You will have to pay for a copy of your credit score, which is different. You can contact the reporting agencies directly to get your credit report
The Fair Isaac Corporation were among the first to launch a credit scoring system that they named FICO. This system is in use by many lenders today in their effort to ascertain borrower risk. They importance various institutions place on this measurement varies, but it is definitely considered to some degree by all.
As much as the credit bureaus endeavor to maintain impeccably accurate records, occasionally mistakes do happen. For this reason it is very important to check your credit report regularly. If you do discover any errors or omissions they are easier to fix the sooner they are identified.
Because a lot of importance is placed on your credit rating, it is important that you make every effort to look after it. Be certain to make your payments on time, because missed payments above all else will have the most detrimental effect on your score.
Lots of outstanding debt will drive down your score as well. Do not open up more credit accounts than you need. Additionally be careful when even applying for credit. Frequent credit bureau inquiries can hurt your score too. It is difficult to bring your score back up after it takes a hit, so it is not a responsibility to be taken lightly.
Your credit history is tabulated by three main reporting agencies. They collect and organize information regarding late payments and outstanding balances and put them into the form of a report. Then when you apply for credit, the lender can review your past behavior and make an informed decision as to whether or not to approve your request.
You are able to obtain a free copy of your credit report once a year. You will have to pay for a copy of your credit score, which is different. You can contact the reporting agencies directly to get your credit report
The Fair Isaac Corporation were among the first to launch a credit scoring system that they named FICO. This system is in use by many lenders today in their effort to ascertain borrower risk. They importance various institutions place on this measurement varies, but it is definitely considered to some degree by all.
As much as the credit bureaus endeavor to maintain impeccably accurate records, occasionally mistakes do happen. For this reason it is very important to check your credit report regularly. If you do discover any errors or omissions they are easier to fix the sooner they are identified.
Because a lot of importance is placed on your credit rating, it is important that you make every effort to look after it. Be certain to make your payments on time, because missed payments above all else will have the most detrimental effect on your score.
Lots of outstanding debt will drive down your score as well. Do not open up more credit accounts than you need. Additionally be careful when even applying for credit. Frequent credit bureau inquiries can hurt your score too. It is difficult to bring your score back up after it takes a hit, so it is not a responsibility to be taken lightly.
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For more information on the rating scale credit score and increasing your average FICO score please visit The Credit Camp.
posted by Credit Counseling at
4:27 PM
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