Credit Rating Scores

Credit rating scores are numbers produced by ainclude absence of credit references, late payments,
mathematical formula according to the informationand unfavorable credit card use.
contained in your credit report. This information isUsually, credit rating score is a three digit number
processed through special software and a score isranging between 375 and 900. The median score in
arrived at. The score is used by financial institutions forthe United States is about 720. Higher scores mean
evaluating an individual's possible ability to pay back amore financing options and better interest rates.
debt.Scores below certain numbers result in the rejection of
Credit rating scores vary at different times dependingcredit. When you apply for a mortgage, home equity
on the changes or additions in your credit history.loan, car loan, line of credit, or business loan, the
Every credit rating score is accompanied by afinancial institutions first check your credit rating scores
maximum of four reason codes. Reason codesfrom the credit bureaus.
indicate the reason why a consumer did not scoreCredit rating scores significantly affect your ability to
high. There are various credit rating systems. Fair Isaacget credit. Borrowers now use the scores as a part of
Credit Rating Score (FICO) is the most widely usedtheir general financial promotion strategy. Some
system of credit scoring in the United States.insurance companies use your credit rating score to
The scores depend on several factors includingset your premium rates and some prospective
payment history, amounts owed, length of creditemployers use this to estimate your sense of
history, pattern of credit use, and types of credit in use.responsibility.
Factors that can damage your credit rating score