Credit Score Basics

Now you probably know that your credit report is essentially your credit history.  It details what sort of loans are outstanding, how long you’ve had them, whether you pay your bills on time and so on (the information is not just from credit card companies, but all your creditors, including utilities, landlords, hospitals, banks, etc.).


Your credit score, however, is more complicated.  It’s a computer-based determination of the risk you pose to each of your creditors.  In fact, it’s calculated differently for each lender, using those particular parts of your credit report that are thought to be the most telling.


According to Fair, Isaac & Co., a leading supplier of credit data, these scores include up to 100 factors, including the number of times you’ve paid bills 60 days late, the size of your credit line (particularly the part that isn’t being used), the number of recent inquiries into your credit history (an indication that you’re looking for more credit) and any bankruptcies, liens and foreclosures.


Unfortunately, while you can, and should, take an annual look at your credit report, you can’t see your credit score. It’s available only to lenders and they pay handsomely for it.  But you improve your score (and your overall credit history) with some fairly simple maneuvers.



Your thoughts on this subject?  Your comments appreciated!


Content © Rich Brott, 2011

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