subject: Credit Scores and Credit Systems [print this page] Credit Scores and Credit Systems Credit Scores and Credit Systems
Recently, with the faltering tendency of real estate and mortgage market, credit score is emerging as the most significant "number" in the lives of all the customers. The credit score is often the most important factor in determining how much is to be paid by the consumers for mortgage, loans and for different purposes like refinancing and credit cards.
In U.S a credit score is a number between 300 and 850 based on the statistical analysis of a person's credit report. A credit score is mainly based on credit report information, usually from the three major credit bureaus. Lenders, such as banks and credit card companies, use credit scores to estimate who qualifies for a loan, at what interest rate, and to what credit limits.
- Your credit score is a method of predicting your ability to pay back loans, and is used by almost all creditors when deciding to do business with you.
- Most of the businesses check the credit score of the client and discuss about it in decision-making process.
- Knowing the basis of calculation of the credit score is very important because it gives you the information you need to improve your score.
- Credit score stimulator is an online toll that helps you to know about your credit score.
Credit score stats can help you understand what a good credit score is, what the possible ranges of a credit score are are and how you stake up against the average credit score.
The components of the credit report and the approximate weighted content of each are as follows:
- Timeliness of payment in past - 35%
- The amount of the debt, expressed as the ratio of the current revolving debt to total available revolving credit - 30%
- Length of past credit - 15%
- Type of the credits used - 10%
- Recent search for credit or recently obtained credit - 10%
There are three main institutions, ruling over the credit score and credit system market presently, which offer standard credit score system. These are Experian, Equifax and Trans Union. At the time of providing information on your credit worthiness all credit reporting agencies must maintain the maximum truthfulness.
The credit reporting agencies maintain track of all the information necessary for your preliminary awareness on credit score and credit system. It is quite impossible to keep records of every consumer's individual information. This year they have posted all record profits. Even the highest profits also.
If we see the present report then we may see that, in recent days, all the burden of complying with the FCRA is on the Credit Reporting Agencies, not on the consumers. Thus if the credit reporting agencies do not give importance to your credit, you have the full right to file a case against them. In this way you may force them to act upon and correct your credit report. If the agency fails to satisfy you then they have to pay you statutory damages of up to $1,000, and pay your attorney's fees.
Martin Lukac represents RateTakeMortgage Loan mortgage marketplace. RateTake matches consumers with multiple lenders offering lowRefinance Rates from our network of accredited lenders.
