In this day and age, it is crucial to maintain a decent credit score, especially when wanting to purchase a home or car. If your credit score is 700 or above, there isn’t anyone who won’t grant you a loan. Triple A credit is another luxury to have that most people may never obtain in their lifetime due to poor financial choices. Below are several steps in order to obtain and evaluate your current credit scores and learning how to correct before shopping for a car or home.
Your credit report houses information on how you pay your bills, if you have been arrested or sued, filed for bankruptcy and where you currently live. Nationwide consumer reporting companies sell information within your reports to employers, creditors and insurers who utilize all information to evaluate your applications for credit, renting or buying a home and obtaining insurance.
Obtaining your credit reports online
It is a requirement by The Fair Credit Reporting Act that the three main consumer reporting companies Trans Union, Equifax and Experian provide consumers with copies of their credit report once per 12 months while promoting privacy and accuracy of consumer reporting companies.
Below is pertinent information the nationwide consumer reporting agencies have provided in order to obtain your free credit report, you may order all three credit reports from each consumer reporting agency or you may choose to order only one report at a time, either way by law you are permitted to obtain one free copy of your report from each of the reporting agencies per year.
P.O. Box 105281
Atlanta, GA 30348-5281
The only information needed to obtain your free report is date of birth, name, address, and social security number. Each consumer reporting agency will ask for different verifiable information only you know because each of your files have been obtained from different sources.
Your FICO score
FICO is an acronym for Fair Isaac Company which was a company whom originally created the system used to condense credit history into one distinct number, major credit agencies, businesses and bank lenders have adopted this system.
Ultimately, one’s credit score is determined by major factors such as amount currently owed to lenders. Loans, credit cards and mortgages are based upon 30% of your score and how much owed.
At least 35% of your FICO score is based upon how you successfully repaid debts from the past. How long have you had credit history? 15% of your score is based upon lengthy credit history which is of a major benefit to you.
10% of your credit score is based upon the amount of inquiries listed within your credit rating, the least amount of inquiries are better as some lenders tend to view frequent applications of credit in said amount of time a negative impact, think of someone who has assumed the identity of another and how many accounts they open up simply because it isn’t in their name.
All factors stated above are how your FICO score is calculated, this one simple number of 650 or 700 is crucial in enabling you to obtain any type of credit you can think of. If you have a wonderful score of 700, you’ll definitely are deemed credit worthy by many lenders. If you maintain a score of 600 or below, most likely you will have to invest some time and effort in order to rebuild your credit before applying for any type of loan.