A credit score is a
number assigned by credit reporting companies based on information available on
your credit report. Like a test score,
the higher the score, the better your credit. A good credit score shows
that you have a high probability of repaying loans on time. Therefore, a
good credit score will help you take out loans more easily and even get better
interest rates. The three nationwide consumer credit reporting companies
(Equifax, Experian, TransUnion
) use VantageScore
to
determine consumers' credit scores. Below
is
information regarding VantageScore.
Please note: Some lenders use their own credit score
calculations, so you can end up with a number of different credit scores.
Breakdown of what makes up your credit score
Payment
History is how often you pay your bills [makes up 32% of your
overall credit score].
Amount of Debt
is how much debt you owe [makes up 15% of your overall credit
score].
Length of Credit History and
Types of Credit is how often you use your accounts and how many
accounts you have open [makes up 13% of your overall credit score].
New Credit is
how many recently opened accounts and recent credit inquiries there are in
your credit file [makes up 10% of your overall credit
score].
Utilizationis the amount of
available credit you use [makes up 23% of your overall credit
score].
Available
Credit is the amount of credit you have [makes up 7% of your
overall credit score].
Credit Score System Credit scores range from
501 to 990 and can be represented by the A, B, C, D and F grades you would see
in school grading systems. When creditors look at your score, they check
to see if you are a low- or high-risk borrower. A low-risk borrower is
someone who most likely would repay their loans, while a high-risk borrower is
someone who most likely will be unable to repay their loans on time. Here
are the score ranges:
Purchasing your credit score and more You can
purchase your credit score from one of the three credit reporting agencies (Equifax, Experian, TransUnion).
However, we strongly recommend that you review your free
credit report before obtaining your score.
A credit score is a
number assigned by credit reporting companies based on information available on
your credit report. Like a test score,
the higher the score, the better your credit. A good credit score shows
that you have a high probability of repaying loans on time. Therefore, a
good credit score will help you take out loans more easily and even get better
interest rates. The three nationwide consumer credit reporting companies
(Equifax, Experian, TransUnion
) use VantageScore
to
