Today, many consumers do not understand the importance of credit ratings and how it affects their daily lives. Some are not aware that credit scores exist, or that credit scores are readily available and accessible online.
Your score can determine what you pay for the financing and auto leasing, credit cards, mortgages and insurance. It may even affect whether or not you find a job or rent an apartment.
Currently, the loan and the mortgage market has strengthened significantly. Buyers with poor credit who could easily get a new car loan or mortgage new house a few months ago are now denied. Many auto dealers are turning away customers with a lower score to 700 credits. It became more important than ever to have good credit.
Many poor credit ratings resulting from errors or outdated information about you in your credit history reports. Negative information can remain on your report for seven jadwal bola years, bankruptcies for ten years. You should always work to improve your score and repair your report if you find errors.
What is a credit score?
A credit score, called FICO score is a mathematical way to condense all the information contained in your credit history to a single number that represents your creditworthiness and credit risk. This way, lenders have to sort through all of your detailed report credit history. One number says it all. Credit scores range 300-850.
This unique number has a tremendous impact on how you are viewed by companies with whom you do business. They judge by the number.
Be aware that lenders may also use other information, and your score, making decisions about your creditworthiness. For example, the debt-income ratio and employment stability are very important. Credit reports and scores do not reflect this information.
Who created the credit scores?
Credit reports and credit scores are produced by three different companies in the United States – Equifax, Experian and TransUnion. Each company collects its data independently from other companies, which means that data concerning a particular individual may differ between the three companies. Lenders often obtain scores with the consumption of each company and to average to obtain a composite score.
Your score can vary by almost 50 points or more between the three credit agencies. For someone with borderline scores good bad credit, it can make a big difference, as the Agency Profile, a lender looks. Lenders may look one partition, or they can consider all three.
The reports of consumer credit has been around for many years. Credit scores, however, are relatively new, and quite recently been made available to the public via the website of Fair Isaac Corporation.
What a good credit score?
It depends on the lender. Each lender uses its own judgments about the scores. In general, a score above 680-700 is considered “first.” Scores First get the best rates. Scores in the range 620-680 are “near-prime” and scores below 620 are generally considered “sub-prime. Sub Prime scores can expect denials of loan or interest rates that are up to 10% -12% higher than the prime rate.