My Credit Report: What is it?
Your credit report is an important document even if you don’t want to obtain credit. It is used by anyone, such as a prospective employer, that wishes to obtain a good overall idea of what you are all about. In the event that you haven’t actually seen a copy of your own credit report, you can obtain yours and your credit score from MyFico.com (this is the only place I recommend for REAL credit scores)
Basically, a credit report contains information about where you reside, how you pay your bills, whether you have been evicted or filed for bankruptcy, your past addresses and telephone numbers (unless unpublished) and, in some cases, whether you’ve ever been arrested or incarcerated. It will also show inquiries from other people who are considering extending you credit, debt write-offs, car, boat, or RV repossessions and more. Copies are sold by the reporting agencies to creditors, employers, landlords, banks, finance companies, insurance companies and other businesses. Thus, a good portion of your life remains an open book.
Your FICO score = Your creditworthiness
A FICO score, so named because it was developed by Fair Isaac Corporation, is a number that reflects the ‘risk’ a lender will take when granting a loan. In general, the higher the number, the less risk and the better off you are. The score is generated by software designed to analyze credit data. Since the three major credit reporting agencies don’t utilize the exact same software, the FICO score may vary somewhat from report to report. The key factors used in determining your FICO score include: payment histories, outstanding debt, length of payment history, the types of credit used and new credit accounts established. Of these, payment histories and outstanding debt account for about 65% of the total FICO score generated.
FICO scores ordinarily range from 340-850, with people having scores of 700 or above considered worthy of several financing options and lower interest rates. 51% of the U.S. population currently has a FICO score in excess of 700, with another 27% scoring between 600 and 700. Major lenders have been known to assemble three different FICO scores from the reporting agencies and then use the middle score to assess your creditworthiness.
You can get your FICO score at MyFico
Credit report analysis
When analyzing your credit report, lenders look at payment history in terms of how many accounts have been paid as agreed upon; the length of time that you have been past due and how long it has been since your last past due payment was made. Negative public records and collections are also considered. The review your debts to determine how much you owe and on what kinds of accounts; the percentage of the maximum amount of revolving credit you have used; and the amounts you owe on installment loans compared to their original balances. A mixture of different account types usually results in a better credit score.
Where new lines of credit are evaluated, lenders consider both how many you have recently established and how that number compares to your total accounts. They also consider the number of recent inquiries and the time that has passed since new accounts were opened and inquiries were made.
Get your score now
The place I get all my scores from is MyFico.com, they have the best rates, and an easy to use website to access all three of your scores. Go here, and use coupon code GOALS25 when you check out for a discount.
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