| In this day and age it is vitally important to maintain a | | | | companies get their information from different |
| decent credit score, especially if you plan to make | | | | resources; you could have an error on one and not |
| major purchases like a home or a car. If your credit | | | | another. |
| score is 700 or above, your chances for being denied | | | | Your FICO Score |
| a loan are very slim; and while Triple A credit is a | | | | FICO is an acronym for Fair Isaac Company which |
| luxury people dream of, few actually achieve that goal | | | | was the company that originally created the system |
| due to poor financial choices. However, you can make | | | | used to condense credit history into one distinct |
| the most of your score by understanding the credit | | | | number; major credit agencies, businesses, and bank |
| rating system, and by maintaining awareness of your | | | | lenders have adopted this system as a means of |
| standing. Doing this before you begin to shop for a | | | | evaluation for creditworthiness. |
| home or auto loan can save hundreds and thousands | | | | Ultimately, one's credit score is determined by major |
| of dollars just on the interest rate. It could also mean | | | | factors such as amount currently owed to lenders. |
| the difference between being approved or denied. | | | | The general break down of how your score is |
| What's In A Credit Report? | | | | determined is as follows:o Outstanding loans, credit |
| Your credit report houses information that ranges from | | | | cards, and mortgages, and the amount owed on each |
| fairly personal information to your income and | | | | (as well as the type of debt-revolving, secured, etc.) |
| borrowing habits. It lists things that creditors will want to | | | | makes up about 30% of your score.o At least 35% of |
| know before they decide to lend you money; things | | | | your FICO score is based on how successfully you've |
| likeo How you pay your billso Your present and past | | | | repaid past debts.o 15% of your score is based upon |
| employment historyo If you have been arrested or | | | | how long you have been utilizing credit; a lengthy credit |
| suedo If you have filed for bankruptcyo Your current | | | | history is of major benefit to you. This is not based on |
| residence, and past addresses depending on the time | | | | age, either-you can be middle aged with no credit if |
| you have been at your current address | | | | you do not take loans or use credit accounts, or you |
| Nationwide consumer reporting companies sell | | | | can be young with a long history of borrowing and |
| information within your reports to employers, creditors, | | | | repayment.o 10% of your credit score is based on the |
| and insurers who utilize all information to evaluate your | | | | amount of inquiries listed-on how many entities you |
| applications for credit, renting or buying a home, and | | | | sought credit from and allowed access to your credit |
| obtaining insurance. | | | | report. Lower numbers of inquiries are better as some |
| Obtaining Your Credit Reports Online | | | | lenders tend to view frequent applications of credit in a |
| It is a requirement of The Fair Credit Reporting Act | | | | specific period of time to be negative, and from the |
| that the three main consumer reporting companies, | | | | standpoint of the credit reporting agencies numerous |
| Trans Union, Equifax, and Experian, provide consumers | | | | inquiries indicate that you need to shop many sources |
| with free copies of their credit report once every 12 | | | | to obtain credit. |
| months (upon request). These companies are also | | | | All of these factors determine the number that makes |
| charged with promoting privacy and accuracy of | | | | up your credit score. This one simple number is crucial |
| consumer reporting. | | | | in enabling you to obtain any type of credit. Scores of |
| You can obtain a free copy of your credit report by | | | | 657 to 700 are considered good, and with a score of |
| either requesting it in writing directly from each of the | | | | 700 or above you're likely to be deemed creditworthy |
| three major credit bureaus, or by using the online | | | | by many lenders. If you maintain a score of 600 or |
| request system they have created. is a site that is | | | | below, most likely you will have to invest some time |
| sponsored by TransUnion, Equifax, and Experian to | | | | and effort in order to rebuild your credit before |
| make it fast and easy for consumers to get reports | | | | applying for any type of loan. In addition, the higher the |
| online as they fulfill their legal requirements. You may | | | | score the lower the cost of lending will be to |
| order all three credit reports from each consumer | | | | you-higher scores net lower interest rates because |
| reporting agency or you may choose to order only | | | | they are considered less risky, while lower scores |
| one report at a time; either way by law you are | | | | show some past trouble and increased risk for the |
| permitted to obtain one free copy of your report per | | | | lender, so when credit is offered it will be at a higher |
| year from each of the reporting agencies. | | | | rate that allows lenders to recoup more on their loan |
| The only information needed to obtain your free credit | | | | earlier on. |
| report is your date of birth, name, address, and social | | | | Understanding credit scores can be difficult, but highly |
| security number. Each consumer reporting agency will | | | | beneficial. When you know more about how banks |
| ask for different verifiable information only you know | | | | and lenders evaluate you, and how you can confirm |
| because each of your files have been obtained from | | | | your good rating, you understand where you fall on the |
| different sources. | | | | lending spectrum, and what options you have for |
| It is recommended that you check all three and not | | | | improving your present and future financial situation. |
| assume all of them to be correct if the first is, since all | | | | |