| A credit score is a snap shot of your credit risk | | | | number, ranging from 350 to 850. A credit rating |
| (ie how likely you are to repay a debt and repay | | | | assesses the credit worthiness of an individual, |
| it on time) at a specific point in time. The higher | | | | corporation , or even a whole country. Credit |
| your score, the lower the risk. A credit score is a | | | | ratings are calculated from financial history and |
| number indicating your financial risk. | | | | current assets and liabilities. |
| In short, it/'s a score measuring how likely you | | | | Check online to see what could affect your credit |
| are to repay debts, such as loans or lines of | | | | score. Check out several lenders, ask about their |
| credit. A credit score is like the numerical version | | | | interest rates and loan terms, and find out more |
| of your credit report. Credit scoring is the process | | | | about their loan process. Be careful, though, not |
| of using a proprietary mathematical algorithm to | | | | to submit a flurry of applications in a short period |
| create a numerical value that describes an | | | | of time as that might affect your credit score. |
| applicants overall creditworthiness. | | | | Checking your credit report is one of the most |
| FICO does offer a package called Score Watch, | | | | important things you can do. You can use your |
| which is basically a 30-day free trial. When you | | | | credit report to make sure your credit history is |
| sign up for Score Watch, you get a free FICO | | | | correctly recorded before you apply for a big loan |
| score and credit report. FICO, the most widely | | | | or a mortgage. |
| known type of credit score, is a credit score | | | | Check to see if past financial ties (such as bills |
| developed by Fair Isaac Corporation . It is used | | | | with ex-partners) have been removed. If a record |
| by many mortgage lenders that use a risk-based | | | | does have to be amended, make sure it has been |
| system to determine the possibility that the | | | | changed by ordering another report six weeks |
| borrower may default on financial obligations to | | | | later. |
| the mortgage lender. | | | | Credit score is becoming more and more |
| FICO scores are been used by credit-card | | | | important to our financial lives as time goes by. |
| companies, auto loan providers and mortgage | | | | Investors, borrowers, issuers and Governments |
| lenders as part of a process to grant credit for | | | | may all use opinions from credit rating agencies. |
| billions in purchases. Often called | | | | Different lenders use slightly different factors to |
| âFICOsâ these scores incorporate five | | | | come up with a credit score for you. Also, the |
| types of information about a persons finances to | | | | definition and thresholds of a good or acceptable |
| calculate a score on a scale of 300 to 850. FICO | | | | score will vary from one mortgage lender to |
| recognizes 5 different balance tiers: 20, 40, 60, | | | | another. |
| 80, and 100 percent usage. | | | | Different lenders place different weightings on |
| A good rule of thumb is that if you are applying | | | | these factors. This explains why some lenders will |
| for a loan in the near future and have the | | | | reject you for a credit card and others will refuse |
| resources to pay your balances under 20 of the | | | | you for a personal loan or mortgage while others |
| limit your scores will be very good. | | | | are happy to welcome you as a customer. |
| We cannot stress too much that your credit | | | | Information here should not be construed as |
| rating not only measures credit worthiness, or | | | | advice and it is offered without legal responsibility |
| your ability to pay back a loan. It also affects the | | | | or liability. It must be emphasized that you should |
| interest rate applied to loans. | | | | consult a professionally qualified individual or |
| Interest rates vary depending on the risk of the | | | | company (such as an accountant, financial adviser |
| investment. A credit score, also called a credit | | | | or solicitor for example) should you need advice |
| rating. | | | | on your financial situation, as they will be able to |
| It is one of the main keys to a person's financial | | | | tailor their advice to your personal needs |
| life. Credit ratings are expressed as a three-digit | | | | accordingly. |