What Is A Credit Score?

Credit scores range from 350 to 850 - the higher your score, the more favorable interest rates you will receive on a loan. A credit score may impact whether or not you receive credit as well as other credit terms such as percent interest rate, etc. Lenders consider several factors, including a credit score, when extending credit. credit repair

A credit score is a three digit number calculated based on information in your credit report and statistical information about others borrowers that lenders use to determine the likelihood of certain credit behaviors. It is intended to measure an individual's credit risk and whether you will repay the loan in a timely manner. Lenders use credit scores to mitigate losses due to bad debt. credit repair

According to the scoring model, as your score increases, your risk of default decreases. Your score is used by the lender to determine who qualifies for a loan, at what interest rate and at what credit limit. Credit scoring is not limited to lenders. Now other entities as cell phone providers, insurance companies, utilities, ISPs, cable companies, employers and government departments use similar techniques. credit repair

The most widely used credit score, formulated by Fair Isaacs Corp is called a "FICO score," usually ranges from 300 to 850. A higher score means less credit risk. Credit reporting agencies may each calculate a somewhat different FICO score because of differences in the information that is reported to those agencies. You are entitled to obtain your credit score from your lender free of charge when applying for a mortgage and in certain situations listed later as when denied a loan. Credit scores are not "free" and beginning in 2001 you can purchase your credit score for a fee from the credit reporting agencies and credit monitoring services.

Errors in your credit report can affect your credit score and your ability to get a loan at a favorable interest rate. While you cannot dispute a low credit score, you can challenge information in your report. Negative information is usually harmful and brings down your score and its removal can result in a higher score. Where does your score stand, well only 1% of the population have the perfect 850, 11% have a FICO score of 800 plus, the average score now lies just below 700. Less than 600 and you will start to have problems obtaining credit. credit repair