Your Credit Score
When you apply for credit, lenders determine your credit by examining your credit scores, also known as the FICO score.
Who looks at it?
You should know that your prospective employer, your insurer and your landlord also look at it.
The FICO Scores are developed by the Fair Isaac Company.
It is important because it affects how much money you can borrow? What kind of interest you will pay? Finally, what perks you are entitled to from your credit card company.
Range of Scores
FICO Scores range from 300 to 850. The higher your score, the lower your perceived risk to a lender.
So what is a good score?
You really want to get beyond 750. Under 650 is bad. That is considered subprime.
|FICO Scores||How Good?|
|750 to 850||Best|
|720 to 780||Above Average|
|650 to 720||Average|
|< 650||Not so good (Subprime!)|
So what kind of data a credit reporting agency collects from you?
Your payment habits, where you live and work, and whether you get into legal trouble.
Credit Score Agencies
There are THREE Credit Reporting Agencies. Equifax, Experian and TransUnion.
Here is how they calculate your score?
- 35% Payment History
- 30% Debt Level
- 15% Debt Account History
- 10% New Debt
- 10% Type of Debt
Check Your Credit Score
Because of the importance, you should always check the report for accuracy. You are allowed one FREE report a year. Download report at www.AnnualCreditReport.com. You should check for inaccuracy, fraud, identity theft, rights of information release permissions to concerned parties, and ask for reprieve for missed payments.
Negative records can stay for 7 years before expire. Bankruptcy could be 10 years.
Finally, it is important form good financial habits. Your credit is GOLD.
Read: Credit Scores
Activity: Estimate Your FICO Score