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Credit Score: What Is It and How to Get Yours For Free

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In the United States, your credit score is everything. It is something that you should take care of or if you don’t, getting a phone, cable or gas line hooked up in your home can be difficult to do. There are also certain companies that take a look at your credit score first before they even hire you. Even if you are qualified to do the job, a low credit score can ruin it all for you. Your credit score is also analyzed by creditors, such as banks and credit card companies. Just try to imagine that you need to get a loan to start your own business, with a low or bad credit score, you have a lesser chance of getting that loan approved or you may get it approved but with high interest rates. The same thing goes when you apply for a credit card. Credit card companies or banks that issue credit cards will first take a look at your credit score before they can get your application approved. A high credit score means that you have a greater chance of getting the best credit card deals with a lot of features and also with low interest rates for your every purchase using a certain credit card.

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									          Credit Score: What Is It and How to Get Yours For Free
In the United States, your credit score is everything. It is something that you should take
care of or if you don’t, getting a phone, cable or gas line hooked up in your home can be
difficult to do. There are also certain companies that take a look at your credit score first
before they even hire you. Even if you are qualified to do the job, a low credit score can
ruin it all for you.

Your credit score is also analyzed by creditors, such as banks and credit card companies.
Just try to imagine that you need to get a loan to start your own business, with a low or
bad credit score, you have a lesser chance of getting that loan approved or you may get it
approved but with high interest rates. The same thing goes when you apply for a credit
card. Credit card companies or banks that issue credit cards will first take a look at your
credit score before they can get your application approved. A high credit score means
that you have a greater chance of getting the best credit card deals with a lot of features
and also with low interest rates for your every purchase using a certain credit card.

Even if you are applying for a mortgage, a car loan and other kinds of loans, your credit
score will play a very important role in it. This is why it is very important for you to
have a high credit score and maintain it that way or increase it.

First of all, you have to understand what a credit score actually is. A credit score will
represent a three digit number from 300 to 850. This number will represent a calculation
of the likelihood of whether you will pay their bills or not. This means that if you have a
high credit score, creditors will be sure that you will pay your bills or your loan.

In the United States, FICO or Fair Isaac Corporation is the best-known credit score
model in the country. They calculate your credit score using a formula developed by
FICO. The system is used primarily by credit industries and consumer banking
industries all across the country.

Credit scores are calculated in the following factors:

•      Punctuality of payments – This will be 35% of the calculation. If you pay your
bills on time or before the due date, your credit score will tend to be higher.

•      Capacity used – This will amount to 30% of the calculation of your credit score. It
will contain a ration between the current revolving debts to total available revolving
credit. If you use your credit card and if you don’t use its entire credit limit, you will get
a higher credit score.

          Credit Score: What Is It and How to Get Yours For Free
          Credit Score: What Is It and How to Get Yours For Free

•      Length of credit history – This will amount to 15% of the calculation of your
credit score.

•     Types of credit used – This can affect 10% of your total credit score.

•    Recent search for credit or the amount of credit obtained recently – This will
amount to 10% of the total calculation of your credit score.

Surprisingly, not many people know their credit score and often end up wondering why
they got denied for their loan or credit card application. You can easily obtain a copy of
your credit report by requesting for it from FICO or from the credit reporting agencies.
They will be able to provide you with a free calculation of your credit score every year.
It is also a great way to find out if there are any errors in your credit report that may be
causing you to have a low credit score. You can request it to be fixed in order to let you
have a higher credit score than before.

Always remember that your credit score is an important factor of your life. Keep it high
and you will get better deals on loans, and credit cards.



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          Credit Score: What Is It and How to Get Yours For Free

								
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