subject: Understand Your Credit Score [print this page] Although credit scores may seem a little bit mysterious, they are actually based on some hard data. Here at CreditNowUSA, we want to help you understand what a credit score is and what you can do to affect your score.
What a Credit Score Is
Your score is a three-digit number that ranges from 300 to 850, with higher scores being better for you. Your score is based on a series of calculations based on information on your credit report. Information gets onto your credit report because your lenders send it to three credit bureaus: TransUnion, Experian, and Equifax. Because you have three separate credit reports, you also have three separate credit scores, one from each report.
How Your Credit Score is Used
Lenders often look up your credit score as part of the application process for a loan, credit card, or line of credit. They use your score to determine how much of a credit risk you are. The higher your score, the lower risk you are for the lender. This makes the lender more likely to lend to you, and also more likely to offer a lower interest rate. In addition to its use by lenders, many other businesses can obtain your authorization to check your credit. Employers, insurance companies, utility companies, and cell phone companies all may use your credit report to influence their decisions with regard to you.
Components of Your Credit Score
Your credit score is made up of five major components. In order of importance, they are your payment history, amount of debt, length of credit history, new credit, and mix of different types of credit. In general, if you limit the amount of debt you take on and repay it according to the schedule, with all payments made on time, you should have a good credit score. Bankruptcy, tax liens, and other black marks go into the payment history section and count against you.
If you have any other questions or concerns about your credit score, we would love to answer them and help you get back on track.
For more information, go to Credit Score at http://www.creditnowusa.com/Credit-Score
