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Your Credit Rating Is Determined By Your Credit Score
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by: LynnDaniels
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Word Count: 415
Many consumers tend to a credit score and credit rating confused at times. They are totally different things that are directly connected to each other. A credit score is a number given by the credit bureaus that indicates the risk of giving someone a loan. A credit report is the summary of the consumer's credit history and credit rating. Many financial institutions and some employers will determine eligibility by the report and score combined.
Another word for this score is called a FICO score. This is because there was a software program in the 80's called the Fair Isaac Company that helped to derive a number from the information on credit reports. This score is often times what lenders use to tell if you are worthy of being extended credit.
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 three credit bureaus that need to be contacted are Trans Union, Equifax, and Experian. These are the only places that you can request a copy of your credit report. They will offer one free one to anyone that requests it. There are other ways of getting a FICO score. Some of the places will differ from the other, but it shouldn't be by much. If it is, the companies should be contacted immediately.
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.
You should always work to improve your credit score. Making sure that you pay all of your debts on time is the best way to get started.
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A credit score is a number derived 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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