Credit Score

A credit score is a simple number that many lenders use to determine whether they are approved or not loans or lines of credit to a person. A credit score is affected by a number of factors, some of which can be controlled, factors other than not. There are three agencies leading lenders to acquire an individual credit rating: TransUnion, Equifax and Experian. Many lenders receive two or more reports, details may vary between agencies. Opinions differ on which of the bodies is the best or the most accurate.

The formula that is used by these three bodies is known as FICO, known as the Fair Isaac credit organization, one of the first companies to begin using the ratings in the 1950s. A score FICO is a number between 300 and 900, and more or less approximates the individual measure which represents a lender. A score of 300 is considered very high risk, while 900 indicates that virtually no There is no risk. The score FICO is calculated based on the percentage of your total credit which is currently used (approximately 30% of score FICO), the time that has had lines of credit open (15%), types of credit lines that has (10%), the amount of credit lines opened in the past (10%), and its number of arrears (35%). As a general rule, a score of around 500 credit is a high risk by the that many lenders are denied a credit line, and that if granted credit, will then be penalized to the borrower with high interest rates. An above 850 credit rating will give the lowest rates of interest and a very small down payment in its case.

A credit of more than 650 score is good enough to obtain favourable conditions and they are almost always accepted for new lines of credit. Many organizations offer online access to your score credit. These sites offer reports from the three major bureaus, and details why your score can be low, and offer suggestions on how to improve it. This access to a credit rating information has led to the emergence of many forums and online communities in which members offer help a few others in the management of their credit ratings. Given the importance of interest rates with favourable conditions (especially in large lines of credit, such as mortgage) in the past was worth worth investing the time and a small amount of money in the acquisition of access to your credit history. After September 2005, everybody can get a free copy of the report of credit from each of the three major agencies. In fact, in many States of the American union, consumers already have this right. Even people with relatively strong credit ratings (more than 700) are recommended for more improvements.

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