subject: What Is A Credit Score? [print this page] What is a credit score? Well it is a number that many companies will use to judge your character.
In Canada there are 2 credit reporting agencies Equifax and Trans Union. In the US there are 3 credit reporting agencies Equifax, Trans union and Experion. Your credit report contains information about who you owe money to, how you pay your bills and your borrowing/payment habits.
Lenders refer to your credit score as a beacon score while consumers will receive a Fico score (it is the same number). Your credit score is a number between 300 and 900. 300 representing the worst credit and 900 representing the best credit.
Most banks require a minimum beacon score of 680 in order to qualify for a mortgage with 5% down payment.
Your credit score is used more and more and not just when applying for credit. Employers may require a credit report when considering an applicant, banks when opening accounts, insurance companies when considering homeowners insurance, telecommunication providers and more
While your credit score is very important your entire financial profile is what will be considered when applying for loans, mortgages and other credit.
If your financial profile is weak you will be offered higher interest rates if you are able to obtain credit at all.
If your financial profile is strong you will enjoy ease of credit, the lowest interest rates and lots of borrowing power.
If you have a high credit score but are in a lot of debt, or just changed jobs, or cannot prove your income you will still have trouble obtaining credit.
When banks review a loan or credit card income they consider many different areas of your financial profile that are all equally important. These include cash flow, debt load, debt service ratios, stability, payment habits, credit, income type, residence type, employment type and more
True Assess (www.trueassess.com) offers consumers and online personalized Financial Report Card that actually grades the areas of a consumers financial profile that lenders consider when determining credit worthiness. After grading over 15 areas of your financial profile you will receive recommendations to improve low grades to build your financial profile and work towards achieving financial goals.
Even if you have good credit, it is always prudent to know how the banks view your financial profile. Now theres at least one way to find out how.
