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Alison Cole The
credit score is an indication of a person’s financial creditworthiness. It is
used to verify whether the person qualifies for a loan, or other credit, based
on whether he has repaid his last loan satisfactorily. A credit score is used
by banks and other lending companies for estimating how risky the borrower is.
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It helps them to know how large a loan can be given and at what rate of interest.
In other words, a credit report is a reflection of the past credit history of
an individual. |
In the US, the credit score is based on the FICO (Fair Isaac
Corporation) score that is calculated using mathematical and statistical techniques.
There are also other versions of calculating credit scores such as the kind that
Beacon and Empirica use. A FICO score is based on various factors including: punctuality
of payme
nt in the past, capacity used (ratio of current revolving debt
to total available revolving credit), length of credit history, types of credits
used and recent credits obtained. FICO scores range from 300-850, wherein a score
below 600 is considered “bad”, and a score above 720 is considered “good”. Every
person has free access to credit scores from three credit bureaus: Experian (Experian/Fair
Isaac Risk Model), Equifax (BEACON®) and TransUnion (EMPIRICA®). Apart from these,
lenders can have their own credit scores from other credit bureaus or their internal
systems. Free credit scores and reports can be obtained from these three
bureaus, one from each, once a year, under the Fair Credit Reporting Act (FCRA).
All three reports can be ordered at the same time. The reports can be obtained
by visiting the website: www.annualcreditreport.com or by mailing an Annual Credit
Report request form to the Annual Credit Report Request Service. Certain information
has to be submitted for accessing the free reports: name, address, social security
number, and date of birth. A free report can also be obtained more than
once within the same year in certain situations, for example, if a person is on
welfare, or if the report is inaccurate because of fraud, or if the person is
unemployed and is looking for a job. If a company takes adverse action against
the applicant such as denying an application for credit, insurance, or employment,
one can request a report within 60 days. Free
Credit Score provides detailed information on Free Credit Score, Free Online
Credit Scores, Free Credit Report And Score, Free Credit Score Services and more.
Free Credit Score is affiliated with Free
Government Credit Checks. Article Source: http://EzineArticles.com/?expert=Alison_Cole More
information can be found in our article about Credit
Report Score.
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