Many consumers tend to a credit score and credit rating confused at times. They are totally different things that are directly connected to each other. A credit score is a number given by the credit bureaus that indicates the risk of giving someone a loan. A credit report is the summary of the consumer’s credit history and credit rating. Many financial institutions and some employers will determine eligibility by the report and score combined.
Your score is actually called your FICO score. In the 1980’s, The Fair Isaac Company designed custom soft ware that would give lenders a number derived from a person credit history, that would help them in making the decision of whether your were credit worthy or not. This is called your FICO score.
Credit reports often contain a lot of personal information, such as the name, birth date and address of the consumer. A credit score is not attached to this report, it is added up separately, but it is directly related to the report. There are three places to obtain a copy of a credit report and that is through the credit bureaus. It is wise to see a copy of the report in case there are changes to be made or mistakes that need to be corrected.
The three credit bureaus that need to be contacted are Trans Union, Equifax, and Experian. These are the only places that you can request a copy of your credit report. They will offer one free one to anyone that requests it. There are other ways of getting a FICO score. Some of the places will differ from the other, but it shouldn’t be by much. If it is, the companies should be contacted immediately.
Having a high credit or FICO score is important for the simple reason that this number will follow you throughout your lifetime. When applying for loans, mortgages or consumer credit, your score being at the higher level is important. The score ranges from 300 to 850, with 850 being the highest credit score you can have.
If you are applying for some type of credit, your score will help the lenders to be able to decide how much they will give you. Usually, the better your score, the more you are qualified to borrow. You will also be eligible for lower interest rates. No matter what the loan is for, a low score will result in a higher interest rate. Sometimes credit scores can even be used in the process of hiring employees.
Improving your score is relatively easy if you have made mistakes in the previous years. There are a few things to remember when trying to repair low credit numbers which include keeping older accounts open which are still in good standing as well as having your debt load manageable and making your payments on time.
A credit score is a number obtained from your credit report which will give a lender the ability to establish whether they should give you credit or not for their product or service. improve credit score with credit repair, now!