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What is a Credit Score?
A credit score is a statistical
analysis of your credit habits as they appear on your credit report. While
all credit agencies and lenders use a different formula, putting emphasis
on different parts of your credit history, your credit score should be
equivelant at all.
This number is commonly referred
to as the FICO number, named after the Fair, Isaac company who developed
this universal credit score with Equifax, Experian and Trans Union, who
are the three big credit reporting agencies.
The different parts that make
up your credit score include paying your bills on time, how often you
carry balances and how high they are, and how often you pay balances off
in full each month.
The higher your score is, the
better. A score of 650 or higher means you are a relatively secure credit
risk when looking at you and your credit for a loan. If your credit score
is 600 or lower, you may find it much more difficult to get approval for
a loan, especially for higher dollar amounts, and you may find the terms
and interest rates you are offered are not nearly as good as if your score
was higher.
Your credit score is not included
when ordering a free
credit report. But it is always smart to check to see what your credit
score is before applying.
You
can order your credit score online here.
When you review your credit
score, if you find you are in the low 600 range, it makes sense to try
and improve upon that number before applying, to increase your chances
of an approval as well as better terms and interest rates.'
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