Credit 101
How does a creditor determine whether to grant you credit? For many years, creditors have been using credit scores and credit scoring systems to determine if you'd be a good risk for a loan or credit card. More recently, credit scores have been used to help determine what rates you pay for insurance. What is a credit score and why is it so important?
What is a credit score?
Credit scores and credit scoring systems are used to help creditors evaluate the risks associated with granting loans and extending credit. Everyone has a credit score. Information about you and how you have handled your credit is captured onto a credit report. How you have paid your bills, the number and type of account you have, late payments, collection actions, outstanding debt, and the age of your accounts, is collected from your credit application and your credit report. Using a system, creditors are able to compare all of this data against the credit performance of other consumers with similar profiles. A credit scoring system assigns a point value for each factor and helps predict who is most likely to repay a debt. The total number of points is combined to form your credit score. Your credit score predicts your creditworthiness or the probability that you will repay a loan / credit in a timely fashion. The higher the credit score, the lower the risk associated with extending loans and credit. The lower the credit score, the higher the risk associates with extending loans and credit.
Because credit reports and credit scores are so important in today financial world, it is imperative that you monitor these closely. I recommend that you contact the three major credit bureaus to obtain a copy of your credit report at a minimum of every 90 days. To obtain a copy of your credit report contact:
Equifax: (800) 685-1111
Experian (formerly TRW): (888) EXPERIAN (397-3742)
Trans Union: (800) 916-8800
Just as there are three major credit bureaus, there are three separate credit scores provided by each of them. All of these scores are developed utilizing a method Fair Issac came up with to ensure that an accurate picture of our credit risk is generated. Each score may vary slightly, as the information contain on each credit report from each of the three major credit bureaus is different.
When lenders and financial institutions evaluate your credit report and credit scores, they use information provided by these three major credit bureaus. It is imperative that you monitor these credit reports, as your financial future is contain on those pages. There are rights afford to each of us as consumers by law, which allow us to ensure that the information contained on these reports are accurate With the Federal Bureau of Investigation naming "IDENTITY THEFT" as the number one crime, it is imperative to maintain your credit profile in today's world. Don't let a theif steal you and your families financial futures!
For more information regarding your credit scores, credit reports or debt options currently available to you, please contact Gateway Credit Connection or visit us online at www.creditmonkey.com.
Michael Goff is the Co-Founder of Gateway Credit Connection, helping empower consumers to take control of their personal and business finances.
Gateway Credit Connection
15770 Dallas Parkway
Suite 1100
Dallas, TX 75248
469.547.4323
Visit us online at http://www.CreditMonkey.com
If you have ever fallen behind on your debts you... Read More
Many employers are now looking at an applicant's credit report... Read More
Congratulations college freshman! You're about to embark on one of... Read More
About Search Entries:Every time a lender checks your credit history... Read More
Paying a credit card late fee is the same as... Read More
Most of us get a credit card on our name... Read More
Nearly 20 years ago I worked for a small consumer... Read More
Individual banks elect to become members of ChexSystems, and to... Read More
Identity thieves take advantage of everyday opportunities to discover your... Read More
For people with a spotty credit history or bad credit,... Read More
Raising your credit score can be a fairly simple and... Read More
Almost all students have and use student credit cards. Some... Read More
If you're a college student, you probably already have a... Read More
Credit Counseling and bankruptcy are both ways to relieve the... Read More
Establishing credit and wisely managing your credit becomes easier when... Read More
Not everyone has a positive experience with credit counseling. Potential... Read More
Credit is a funny thing. It can be a useful... Read More
If you've ever applied for a credit card or loan,... Read More
Make Money from StoozingStoozing, this is a sophisticated method of... Read More
When you apply for credit one of the first things... Read More
In their quest to get you to sign up for... Read More
How many of you bank, shop, or transact other business... Read More
Having a damaging credit record can hurt you in many... Read More
The articles and tips provided on this site are intended... Read More
Commercial collections: fixture of the new B2B cultureIf you're in... Read More
Credit is currently and has been historically an integral component... Read More
The credit card companies make billions each year in legitimate... Read More
Establishing credit is one of the most important things you... Read More
Rewards cards have become the latest rage in the credit... Read More
Today, selecting the proper credit card can be a bit... Read More
Do you have enormous credit card debt? You are certainly... Read More
The process of clearing credit can be laborious and frustrating.... Read More
Debt negotiation on credit cards is often referred to as... Read More
Getting your first credit card is a big deal and... Read More
Even if you think you have a wonderful credit report,... Read More
Here are some useful tips on using credit cards. Whether... Read More
Whether you have no credit or damaged credit, secured credit... Read More
To repair your bad credit does not necessarily mean that... Read More
Here are some useful credit card tips for you to... Read More
You may already have 2 or more credit cards in... Read More
1- Check your credit report regularly2- Secure personal information in... Read More
This article is about bailiffs who may call trying to... Read More
So you ordered a copy of your credit report to... Read More
What are the avenues available to businesses with weak credit... Read More
Consumers today are up to their eyeballs in debt. And... Read More
A line of credit, roughly defined, is the amount of... Read More
For years, major credit card companies have allowed cardholders to... Read More
Have you ever looked at your credit card statement? I'm... Read More
Credit Score FactorsThe information contained on our credit reports affect... Read More
When you are deciding what type of credit card to... Read More
Keep Your Credit History Clean - Remove A Negative Credit... Read More
Credit Cards can bankrupt you if you let them run... Read More
The first time I heard the term credit history was... Read More
Have you ever wondered how much money a credit card... Read More
There are times when you may be turned down for... Read More
If you're like most people, you probably own at least... Read More
Credit card debts problem is extremely common today. It is... Read More
With interest rates rising, low or zero percent credit cards... Read More
If you have ever fallen behind on your debts you... Read More
Let's face it, having credit is no longer a choice.... Read More
Your credit score may just be a little number, but... Read More
Credit card debt is a growing sickness in the United... Read More
WHAT IS HIRE PURCHASE/CONDITIONAL SALE?Although people often talk about "buying... Read More
A credit card allows you to buy things even though... Read More
You hear people talk about credit reports all the time... Read More
For those of us who know how to use them... Read More
Credit |