Answer
Apr 25, 2018 - 04:58 PM
Fair Isaac, the makers of the FICO score, is tight-lipped about exactly how the scores are calculated, but they do give the weights of various criteria that they look at:
35% payment history
30% amount owed
15% length of history
10% new credit
10% types of credit used.
While your credit reports are simply a track record of your payment history (no judgments), your credit score is closely related to a school GPA (grade point average.)
It’s a cumulative number that measures your success relative to others, in this case grading you as a credit-worthy individual.
Lenders typically assign interest rates based on what bracket your score falls into.
But credit scores are no longer limited just bank loans, mortgages or car loans.
Increasingly more third parties such as insurance firms, landlords and even employers are using credit scores as a way to figure out how responsible you are.
Your credit score is generated based on the information in your credit report.
In the United States, your ranges from 300 to 850 (850 being the best and highest.)
On the FICO scale, the higher the number, the better. In general, anything over 740 is considered excellent and will qualify you for the best rates.
if your score is below 650, you’ll pay very high rates on loans and credit cards, if you qualify for them at all.
Even 20 or so points can make a big difference in what you’ll pay for credit.
The higher your credit or FICO score, (normally 700 or better) the more likely you will get approved from different business entities.
The lower your credit score is, the less likely your chances become of being approved for a particular product or service or, you will find yourself paying a higher interest rate (usually 20% - 40% or more) for the same product or service as a person with a higher score. (They may pay 5% - 10%) for the same identical thing.
Note: Monitor your credit on a regular basis and pay off anything under $500 to completely remove it from your report.
Anything that you can not afford to pay at once, try contacting the debt holder and make reasonable payment arrangements.
Life is way too short to cheat yourself. Live it to the fullest.
35% payment history
30% amount owed
15% length of history
10% new credit
10% types of credit used.
While your credit reports are simply a track record of your payment history (no judgments), your credit score is closely related to a school GPA (grade point average.)
It’s a cumulative number that measures your success relative to others, in this case grading you as a credit-worthy individual.
Lenders typically assign interest rates based on what bracket your score falls into.
But credit scores are no longer limited just bank loans, mortgages or car loans.
Increasingly more third parties such as insurance firms, landlords and even employers are using credit scores as a way to figure out how responsible you are.
Your credit score is generated based on the information in your credit report.
In the United States, your ranges from 300 to 850 (850 being the best and highest.)
On the FICO scale, the higher the number, the better. In general, anything over 740 is considered excellent and will qualify you for the best rates.
if your score is below 650, you’ll pay very high rates on loans and credit cards, if you qualify for them at all.
Even 20 or so points can make a big difference in what you’ll pay for credit.
The higher your credit or FICO score, (normally 700 or better) the more likely you will get approved from different business entities.
The lower your credit score is, the less likely your chances become of being approved for a particular product or service or, you will find yourself paying a higher interest rate (usually 20% - 40% or more) for the same product or service as a person with a higher score. (They may pay 5% - 10%) for the same identical thing.
Note: Monitor your credit on a regular basis and pay off anything under $500 to completely remove it from your report.
Anything that you can not afford to pay at once, try contacting the debt holder and make reasonable payment arrangements.
Life is way too short to cheat yourself. Live it to the fullest.
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