What are credit scores?

Credit scores are the three digits numbers that businesses use to determine the credit worthiness of an applicant. These numbers range from 300 to 850 depending on the credit scoring company. If you have low credit scores from the three main credit reporting bureaus you will probably have a tougher time getting an unsecured credit card, place to live and even a job. Credit scores are becoming increasingly important in today’s world so using and managing your credit scores is extremely important. You can be denied a vehicle, a mortgage on a new home or even a job if your credit scores are too low. Businesses feel that if you are delinquent in the past on paying bills then you will be too much of a risk for further credit.

What companies handle credit scores?

There are three main credit reporting bureaus in the United States that report all over the world. Equifax, TransUnion and Experien. The way that each company comes up with your credit score is based on their policies. You may have a higher credit score with Equifax than you do with TransUnion or vice versa. It is wise to have a credit checking service that monitors your credit scores with all three businesses as you never know what one business is going to show over the other two businesses. By monitoring your credit score you can also stop any fraudulent accounts being opened in your name because you will be able to see and dispute any open or closed accounts that you may not have opened.

What does a credit score tell about a person?

A credit score tells a lender whether or not you have been faithful to your contracts and have paid your debts in full or are regular about making payments on time. It paints you as a responsible person and a reliable one at that. This is why so many businesses look at a credit score to determine your eligibility to pay back a loan, move into a home or start a business. Your friends may know you as a responsible person but that does not help a lender that does not know you.

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This entry was posted on Monday, October 20th, 2008 at 4:30 pm and is filed under Financial Services. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.