Credit scores explained – your credit score is a number based on the information in your credit report. It is similar to a grade you would have gotten in school, but instead of right and wrong answers your credit score is based on positive and negative credit history.
Your credit or FICO score is used by a lender to help them determine whether you might qualify for a particular credit card, loan, or service. Most credit scores estimate the risk a company incurs by lending you money or providing them with a service. In other words, the likelihood that you would make your payments on time in the future. The higher your credit score, the less risk you represent to a lender. A great credit score is important for getting decent rates on credit cards and loans. The difference could be tens of thousands of dollars over a lifetime.
Your credit score is a number that ranges from 300 to 850. Your credit report is different than your credit score. A credit report lists the full detail on all your credit accounts. It tracks your past payments on all your loans and credit cards.
You should always stay on top of your credit score before you apply for any loans or credit card. Get your free credit score from any or all of the three major credit reporting agencies. You will also find excellent tools such as credit monitoring services to help you stay on top of your credit rating.
Credit Score Alerts let you know when your credit score changes. This could help you qualify for better interest rates and lower monthly payments on new loans.
Credit Scores Explained
How do get a great credit score? Pay your bills on time, have low credit card balances, and the age of your accounts are measured in years. This is our version of credit scores explained, what are your thoughts?