What Consumers Should Know About Their Credit Score

Many consumers tend to a credit score & credit rating confused at times. They are totally different things that are directly connected to each other. A credit score is 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 & credit rating. Many financial institutions & some employers will determine eligibility by the report & score combined.

Another word for this score is called a FICO score. This is because there was a software program in the 80’s called the Fair Isaac Company that helped to derive a number from information on credit reports. This score is often times what lenders use to tell if you are worthy of being extended credit.

Credit reports often contain a lot of personal information such as the name birth date & address of the consumer. A credit score is not attached to this report it added up separately but it directly related to the report. There are three places to obtain a copy of a credit report & 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 FICO number is based on the credit reports collected from three major credit reporting agencies which include Equifax Trans Union & Experian which may give you three different FICO scores at one time. This information is not as accessible as the credit report as there is fee to request this document.

There are a couple of advantages to knowing the number of your score. Knowing the score will benefit you before you make a larger purchase that will require payments to a lending institution. The higher the score the better the credit. The scores will often range from 300 to 850. There are very few people that have ever had a perfect score.

When applying for credit the score will also help determine a lender how much they are willing to lend to you. The higher the number the more they will lend. The higher the score the lower the interest rate will be on the loan. Whether the loan is for renovations on your home purchasing a vehicle or receiving a mortgage when your credit score is low the lender will charge you a higher interest rate which in the long run will take more money out of your pocket. There are also employers who will request this score to see if you will make a good employee.

Make sure you know your score & rating & order a copy of your credit report. This is vital information that needs to be kept correct & current. To find more information do a little research on line.

A credit score is number compiled from your credit report which will give a lender the ability to determine whether they should give you credit or not for their products or services. improve credit score with credit repair now