What Is Your Credit Score Report?
A credit score report is like your progress report you get from your school regarding your performance in academics and other curricular activities. In this report your financial transactions, your ability to repay money, past loan history and all facts pertaining to paying bills on time are all recorded.
Even bankruptcy is reported in the credit report. Check your report regularly for any discrepancy. Also credit score report can help you in finding an apartment on lease or a job you want. Many employers prefer to use these reports to recruit. Fico is the most popular and used credit score in the U.S. The company Fair Issac & co found this rating method in the 1950’s. Though the method is kept a secret, the federal government has authorized this credit scoring method. This is a mathematical calculation which arrives at a three digit number which is your credit score. This credit score decides the credit worthiness of an individual.
The score generally ranges from 350 - 900. If you have a 700+ score then you are considered to be in excellent credit health. You can demand a low interest rate. Not only lower your interest rates you also get instant loan approvals and reduce or even do away with required down payments.
A credit score from 450 to 700 is also considered good credit but at a higher interest. Below 450 is considered bad credit. Lenders look at your credit score report before deciding on the amount and the interest. Paying your bills on time and keeping your credit cards at the optimum level improves your credit scores. Bankruptcy is recorded in your report. This does not mean that you will never get credit again. You can always apply for credit after a period of 20 months. Many people have been given credit this way. The bankruptcy entry remains in your report for a period of 10 years. You can use good credit for education, marriage, buying a house, auto loans, and for retirement. These are stages all of us pass in our life and good credit scores help you at every stage. No one else can have access to the information in your report unless you allow it. Some credit-reporting agencies use a different form of rating system. They rate on a scale of 1 to 9. A rating of "1" means you pay your bills within 30 days of the due date. A rating of "9" means that you never pay your bills at all or that you have made a consumer debt repayment proposal to the lender. These are applicable not only for individuals but also for companies.
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