Theme: Three Free Credit Scores – Information To Help You Know About The Credit Score Maintaining Authorities
March 31, 2009We can borrow money from lenders, but the lenders would want to ensure that we have high credit worthiness. Repayment of the loan is an important factor the lender always considers before approving the loan request. Credit bureaus have been set up for the flow of information about borrowers to lenders. Past credit data is studied by these bureaus and every person is given a credit score. The risk attached to extending a loan to that person is indicated by the credit score figure. When the credit score is high, the lender can know that it is relatively safe to issue the loan. Planning to apply for a loan – get informed about these 3 free credit scores.
There are three separate American credit bureaus. These are, the Experian, the TransUnion and the Equifax credit bureaus. Statistical analysis of individual credit history is carried out to calculate a person’s credit score. The credit worthiness of the borrower is reflected by this credit score. For calculating individual credit scores, separate methods are taken up by these three credit bureaus. Hence, the 3 reports can differ in their findings. A software that is automated calculates the credit score. This software has been designed and made operational by the Fair Issac Corporation (FICO). Hence, credit scores are also known as FICO scores.
A credit report generally has all these credit scores. The bureaus also separately calculate the VantageScore, in addition to the three free credit scores. The VantageScore ranges between 501 and 990. The FICO credit score varies between 300 to 850.
The good news is, you will be able to have access to your credit score, and you will not have to pay anything for this. For this, you will need to subscribe to one of the several credit report monitoring systems of the credit bureaus. The credit bureaus supply this information to the lenders as well so that they can arrive at a conclusion as to your credit worthiness. Based on these credit scores, they can decide whether to lend money to a borrower or not.
Why is it important for you to find out what your credit score is? That is because, it is possible that there is an error in the report. Often the agencies would maintain your credit report for even up to 7 years and so you should definitely verify that the report is accurate. And thus, you must always know whom to approach for your 3 credit scores and also what you should do to know it. You must definitely have the information about this.