Credit Score: What You Need To Know
What exactly is a credit score, and how do you find it out
?
If you;re one of those people whose debt problems are at an all time high, then chances are that you're mostly aware that too much of those debts, late or missed payments could heap upon a lot of negative vibe on your credit score.
But then again, exactly what is a credit score, and how do you find out what yours is?
Everything started out way back in the 1950s, when two men, an engineer named Bill Fair and a mathematician named Earl Isaac, created the very first credit scoring system. This was also the same year that they came together and built the Fair-Isaac Corporation, which created the first credit scoring system in the year 1956.
As the years passed by, the Fair-Isaac Corporation produced more and more systems of credit scoring to assess people's credit worthiness. These became more and more sophisticated up until they developed a major system which has been the benchmark for all credit scoring systems today.
Such that the more likely someone will default on a loan, the higher the interest rates will be.
So it came to pass that whenever a transaction for a loan begins between a lending institution and a loanee, usually they talk with any of three major credit reporting agencies to get this person's credit score before deciding whether or not to give them a loan at all - and deciding how much the interest rate will be and if the person will be able to pay for it.
It is quite essential, though, that you look into hiring a credit repair service or in some cases, you seek credit card debt help before you go ahead and deal with a lending institution.
These three agencies which map out a person's credit score are Equifax, Transunion, & Experian. And in all these mix where does FICO(Fair-Isaac Co.) come in? These agencies, one way or the other, used FICO software in determining a certain person's credit score. these ranges from 300 to 850, with majority of Americans falling into the 600s to 700s category. These days, when credit card debt elimination is essential and everybody wants to reduce credit card debt, a score which roughly falls into the 700s category is highly sought after to manage a mortgage loan...especially a mortgage loan with a good rate.
Here are some of the factors which FICO analyzes during calculation of your credit score:
Payment history at 35 percent - Never pay late!
Amounts owed at 30 percent - if borrowing, never borrow in proportion to your credit history!
Length of Credit History: These usually covers older credit cards, but older credit cards with regular on-time payments helps build good credit.
New Credit: These are the number of your recently opened accounts and your recent credit inquiries. A lot of loans applied to at the same time aggravates your credit so be careful!
Types of Credit used: Credit cards, retail store accounts, installment loans, mortgage loan, etc.
If you want to look at your credit report then you should go to www.annualcreditreport.com and request for it. They are obligated by the law to assist you with this by providing one free copy of your credit report per year, and they are the only site authorized by the Federal Government to provide this service. The Federal Trade Commission suggests that you link to them directly from this address www.ftc.gov/freereports to make sure that the correct site is available. To see your credit score (different from a credit report), you should purchase it from one of these credit reporting agencies: Equifax, Experian, or Transunion.
by: joel christopher
I Need Money For College Titanium Necklace - The Next Hot Trend Titanium Celtic Wedding Rings Titanium Promise Rings - The Perfect Symbol Titanium Watches - Tough And Sophisticated Best Forex Broker - You Need More Than Just Software Stupid! Forex Trading Hours Benefits Of Regulated Forex Brokers Forex Simulator - Practice Makes Perfect Creditor Harassment And Debt Settlement - How To Prevent Creditor Harassment Organic Shampoo Recipes Best Debt Solution For Unsecured Debts - What Is The Best Solution For Debt? Benefits Of Organic Shampoo - Get Amazing Results!