Know your Credit Score

Credit reports are an important financial document that contain details of a consumes credit history – loans, mortgages, credit card dues, debt amounts, regularity of payments, defaults, etc. It is used by various financial and credit companies to evaluate credit applicants and determine the terms on which to lend credit and credit services. Credit score is a convenient way to figure out how good a credit history a consumer has in comparison with others.

Credit scores are also known as FICO scores, and are a statistically determined rating of the credit history of an individual. The score can range from 300 to 850. Various aspects of an individual’s credit history are taken into account to calculate this figure.

When an application for a loan, mortgage, or credit card is made, the credit score may come into picture. Each company may evaluate and judge a particular score differently. In basic terms, a good score means chances of being offered less interest rates, and a bad credit score means having to pay a higher interest rate, or perhaps denial of credit in case the score is pretty bad.

Credit scores can be obtained from the three major credit bureaus who offer their services at a price. The easiest way is to log into their websites and apply online.

Credit reports can also be obtained free of cost from a particular website that has been set up specifically for this purpose.

Knowing your credit score helps you to understand where you stand in comparison to others in the quality of your credit history. If the score is poor, you may need to consult experienced people and find out how to go about improving it.

For more information on credit scores visit - credit reports and scores