The credit score was once confined to the mortgage industry but has made its way into the general financial community. It is a three digit number that ranges from 300 to 850 and demonstrates your ability to repay an amount of money that was borrowed. This snapshot of your financial well being is examined by any creditor that your are attempting to borrow money from. It can cause denial or approval of a loan on its own merit or will cause you considerable consternation as the lending institution seeks further answers to the fitness of your request.
You see, the credit score is a summary of approximately five different factors that together total up the point values. They are listed below:
1). Payment history - approximately 35%
2). Amounts owed - approximately 30%
3). Length of credit history - approximately 15%
4). New credit - approximately 10%
5). Types of credit used - approximately 10%
Each of the items has a role in determining your number. The higher the number, the better risk you are as a loan candidate. The cut off point between a good and bad risk is generally set at 620 with persons below that number labeled as a bad risk. Surprisingly, a number between 730 and 850 constitutes an excellent risk and usually qualifies for the best interest rate. So you don't have to have a perfect score to quality (since very few people actually do), but a very good one.
There are three different national bureaus that monitor your credit rating: Experian, TransUnion, and Equifax. Although they use slightly different methods, the final three digit total are approximately the same. Consider ordering your FREE credit report to check for any errors that may be listed.
Raising your number by even a few points can save you considerable money in the long term. Good Luck.
Ref : Credit Score Online on the spot National Credit Report , Credit Reports and Scores or CreditDotCom
Credit Repair/Debt Management Visit CreditDotcom OR Call Lexington Call Toll Free Now: 877-387-4381 for an Free informal chat.
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