| Credit plays a critical
part in nearly everyone's life, but understanding what credit is
and how it works can be a challenge. A great way to understand the
role credit plays in your life — and to empower yourself as
a consumer — is with a basic knowledge of two credit fundamentals:
Credit Scores and Credit Reports.
Credit Scores
Your credit score is a number based on the information in your credit
file that shows how likely you are to pay a loan back on time -
the higher your score, the less risk you represent. The credit score
that lenders use is called a FICO® score. Your FICO score helps
a lender determine whether you qualify for a loan and what interest
rate you'll pay.
What's in Your FICO Score
Knowing what information a FICO score considers is the first step
in understanding how to improve your credit health and build a better
score.
What's Not in Your FICO
Score
Your credit file contains information that does not reflect on your
creditworthiness - such as race or income - which is ignored by
the FICO score.
How FICO Scoring Helps You
FICO scores provide a fast, objective measurement of your credit
risk, which has a number of benefits for you.
Improving Your FICO Score
By understanding what lenders view as good credit management, you
can build a strong credit history, improve your score and qualify
for better loan terms.
Facts & Fallacies
Learn the facts behind the common misconceptions about FICO credit
scoring.
Credit Reports
Your credit report shows the information you have on file at one
or all of the three major credit reporting agencies - Equifax, Experian
and TransUnion. Each of these reporting agencies (also known as
credit bureaus) maintain their information separately, so the data
you have on file may differ between them.
What's In Your Credit Report
Your credit report contains a variety of personal data. Some of
this information, but not all, is used when making lending decisions.
Fixing Credit Report
Errors
Mistakes happen - and they can affect your ability to obtain credit.
By learning the most common mistakes, you'll know what to look for
when you review your credit report.
Checking Your Credit Report
You should review your credit report from each credit reporting
agency at least once a year and especially before making a large
purchase, such as a house or car.
Average Credit Statistics
Fair Isaac recently surveyed the panorama of credit activity across
the US by analyzing a large sample of people who recently obtained
new credit.
Credit Inquiries
Find out what credit inquiries are, how they may or may not affect
your FICO® score, and much more.
Order a FICO Credit Score |
