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Credit Score Guide
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Is there just one credit score? One of the most common myths about credit scores is that there is only one credit score. Web sites or financial advisors who claim there is only one “real” credit score are either misinformed or are being misleading. In fact, there are many different credit scores used by lenders – some estimate more than 1,000 – although some scores are used more predominantly than others. A credit score is a number that summarizes the historical credit information on a credit report. The number reflects the likelihood of becoming delinquent on a loan or credit obligation in the future.
What information goes into calculating a credit score? Credit scores use information from three key areas of your credit report: account information (such as credit cards, auto loans, student loans and mortgages), public records (such as tax liens or bankruptcies), and inquiries (requests by lenders to view your credit). Information such as race, gender, where you live, and marital status are not used in credit scores.
Why don't I have a credit score? Credit scoring models cannot generate a score without enough credit information. If you have little or no credit history, you will probably not have a credit score available.
Who calculates credit scores? When a lender requests your score, it is calculated by the credit reporting agency. The credit score is one of many pieces of information the lender may use in evaluating your credit application.
How often do credit scores change? Your credit score changes as your credit report changes. Therefore, it can change often since new information is added to your credit report all the time.
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What is the credit score range? There are many different credit scores with differing ranges. As a result, it is possible for two different scores to represent the same level of lending risk. When you request a credit score from Experian, you will receive not only a score, but also an explanation of what the number represents in terms how lenders will view your creditworthiness. If you have a good Experian credit score, you likely will have a good score with lenders, even if the number is different. What are the credit score ranges o A: 720-850 (A Plus) o B: 680-719 (Prime ) o C: 620-679 (Average) o D: 580-619 (Non-Prime)