Credit Score FAQs Frequently
Asked Questions And Answers
Find clear answers to common questions
regarding your credit
What is a credit report?
A consumer credit report is a document containing a factual record of an individual's credit payment historyHow can I get my credit score?
A number of companies offer credit reports that are viewable online. Equifax, Experian and TransUnion determine a credit score based upon a formula.
Where can I get a free credit report?
A number of companies offer free credit reports that can be examined online. Equifax, Experian and TransUnion determine a credit score based upon a formula.
Define Credit Score
What is a credit score?
A credit score is a credit rating that represents an estimate of an individual's financial creditworthiness using a standardized formula and calculated by a statistical model.How do credit scores work?
A credit score attempts to quantify the likelihood that a prospective borrower will fail to repay a loan. Equifax, Experian and TransUnion determine a credit score based upon a formula.
Define Fico Score
What is a FICO score? System developed by the Fair Isaac Company to determine the possibility that the borrower may default on financial obligations to the mortgage lender.
A number generated by a mathematical algorithm. FICO is a credit score scale used by many mortgage lenders that use a risk-based system to determine the possibility that an applicant will fail to pay back a loan. Your FICO score is a key factor in determining the size and type of mortgage you qualify for.
What is a good credit score?
A measure of credit risk calculated from a credit report using a standardized formula. A score ranging from 300 to 900 which reflects the credit worthiness of a borrower, and is primarily determined by timeliness of past loan payments. A good credit score is said to be from 750 to 900.
How do I determine my credit score?
You can determine your score by going to any credit reporting company using Equifax, Experian and TransUnion.
How do I calculate a credit score?
Credit scores are generated by plugging the data from your credit report into software that analyzes it and cranks out a number. The three major credit reporting agencies don't necessarily use the same scoring software, so don't be surprised if you discover that the credit scores they generate for you are different.
The following factors from your credit report is added into a credit score calculation
Your Payment History
Amounts You Owe
Length of Your Credit History
Types of Credit Used
New Credit
Where can I find a credit score scale?
There are two primary credit score rating scales used by lenders. The
R" and "I" system, a multiple rating scale and the single
digit FICO score.
Score Rate Monthly Payments
720 - 850 5.49 $851
http://www.investopedia.com/articles/00/091800.asp
http://www.myfico.com
What is the average credit score?
Most consumer report bureaus report average credit scores annually.
Below is the average credit score for 2003
Up to 499: 1%
500 - 549: 5%
550 - 599: 7%
600 - 649: 11%
650 - 699: 16%
700 - 749: 20%
750 - 799: 29%
Over 800: 11%
How does my score rate compare to others?
Average credit score reports provide a comparison chart indicating average score rates.
Below is an example of an average score rate chart.
Up to 499: 1%
500 - 549: 5%
550 - 599: 7%
600 - 649: 11%
650 - 699: 16%
700 - 749: 20%
750 - 799: 29%
Over 800: 11%
How do I check my credit report?
Contact one or all three of the major US credit reporting. agencies (CRAs):
Equifax, Experian, and TransUnion
How do I improve my credit report?
To make improvement on your credit report first check it for accuracy. The Fair Credit Reporting Act gives you the right to dispute information on your credit report that is inaccurate or outdated. You do this by filing a dispute with the credit bureau reporting the information. You can dispute items on your credit report by sending a letter to the credit bureau.
Using the following tools you can begin making needed changes on your report.
Credit Report Dispute Packet for use in all states. Find Legal FormsCredit Report Dispute Packet for use in all states.
www.findlegalforms.com/xcart/customer/home.php
Federal Trade Commission: Steps to dispute fraudulent information that appears on your credit report.
www.consumer.gov/idtheft/con_steps.htm
Learnthat.com - Credit Report Dispute Template Letter. Example template you can use to send a credit report dispute to credit report agencies, government, consumer and legal entities.
www.learnthat.com/tutorials/go/414.htm
How do I improve my FICO score?
To improve your credit score sometimes called FICO score you need to
focus on the following aspects of your credit report.
Your Payment History
Amounts You Owe
Length of Your Credit History
Types of Credit Used
New Credit
Your Payment History
Amounts You Owe
Make certain amounts you owe are not over-extended. Make sure you are paying these amounts down consistently.
Length of Your Credit History
Length of time since accounts were opened.
Time that's passed since the last activity.
Long good history improves overall credit score
Types of Credit Used
Installment accounts
Revolving credit
Mortgages
A mixture of account types usually generates better scores than reports with only numerous revolving accounts
New Credit
Number of new accounts recently opened compared to total accounts
Number of recent credit inquiries
The time that's passed since recent inquiries or newly-opened accounts
If you've re-established a positive credit history after encountering payment problems
Checking to make sure you aren't attempting to open numerous new accounts
Credit Scoring Software
Credit scoring software only considers items on your credit report. Lenders typically look at other factors that aren't included in the report, such as income, employment history and the type of credit you are seeking.
Can I get an FHA loan with bad credit?
FHA loans are ideal for individuals with credit problems
including bankruptcies and foreclosures. While your credit score is usually the most important
factor lenders consider when approving you for a conventional loan, with an
FHA loan (non-conventional loan) it’s not the central consideration. Connect with
FHA lenders here
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