A credit score and a credit report are two different things that are often confused with one another. When it comes to a score, this is a number that is determined based on your personal information and payment history that will tell your likelihood to repay a loan or other type of credit. This is often a deciding factor when it comes to companies extending credit.
There is a type of software that was created by a company called the Fair Isaac Company in the 1980′s. Now days FICO is the name of the credit rating that is attached to every citizen in America. A person’s credit rating is often the most important factor when they try to use their credit to buy a home or car. This number can be the determining factor in many cases.
A credit report will contain credit inquiries, bankruptcy, payment history, credit use and current credit accounts. The credit report does not have your credit score or FICO number. You are only allowed to request your credit report once a year to see if there have been any changes to your credit history which is suggested as corrections or misunderstandings should be resolved.
The FICO number is based on the credit reports collected from the three major credit reporting agencies which include Equifax, Trans Union and Experian which may give you three different FICO scores at one time. This information is not as accessible as the credit report as there is a fee to request this document.
Having a high credit or FICO score is important for the simple reason that this number will follow you throughout your lifetime. When applying for loans, mortgages or consumer credit, your score being at the higher level is important. The score ranges from 300 to 850, with 850 being the highest credit score you can have.
If you are planning to make a purchase of a big ticket item, such as a home or car, it is in your best interest to know the score and have a copy of your credit report. Make sure both are up to date and correct. The higher the score, the lower the interest rate will be, allowing those that pay their bills on time and in full, save a little money.
Improving your score is relatively easy if you have made mistakes in the previous years. There are a few things to remember when trying to repair low credit numbers which include keeping older accounts open which are still in good standing as well as having your debt load manageable and making your payments on time.
A credit score is a number obtained from your credit report which will give a lender the ability to establish whether they should give you credit or not for their product or service. improve credit score with credit repair, now!
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