Credit Scores?

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What is a Good Credit Score?

One of the most important indicators about you is your credit score, or as it is officially known, your FICO score. FICO stands for the company that manages the reporting of your credit score, the Fair Isaac Corporation, which can be found at (ANOTHER BANKING INDUSTRY MONEY PIT).  Your FICO score is important because more employers, insurance companies, and landlords check this score to see what it is and then largely base your ability to pay for a loan on a car, pay for life and health insurance, and maintain good performance on your job via your FICO score.

Highest Credit Score Possible? Who do you believe.

Having a higher FICO score will enable you to obtain lower rates of interest on such loans as your car loans and mortgage loans.  This can significantly reduce the amount of money you will pay on your loans long term.  You may be wondering, what is a good credit score in 2012?

Good Credit Score Range

FICO scores were originally based on the scale between 300 and 850, though there are  now the “FICO Next Generation” scores based on the scale between 350 and 950.  Most experts agree that any FICO score that is 720 and higher is considered to be the best level of credit score, thereby making you eligible for the lowest rates of interest on various loans.  This is because a higher score indicates a greater chance that you will make your loan payments on time.


There are five main elements that make up a FICO credit score:

-        Payment history (35% of total score):  The longer the unblemished credit history you have, the higher your FICO score will be, as this is one of the most critical elements that lenders look at.  If you have a long period of not missing any payments, your credit score will get a considerable boost.

-        Amount owed (30% of total score):  The amount of money you owe versus the total amount of your credit limit.  You want to try to ensure that you are not spending at or near the maximum amount of your credit limits so that you can convince lenders that you are not at higher risk of missing future payments, which can lower your credit score.

-        Length of credit history (15% of total score):  The longer your credit accounts have been open, the greater the influence this will have on your credit score. FICO scores consider your oldest account, as well as the average age of all of your accounts.

-        New credit (10% of total score):  You can lower your FICO score by opening too many new accounts at one time.  Additionally, when many lenders submit credit inquiries of your account in a short period of time, this too can lower your FICO score.  Note that inquiries made by you, an employer, or a lender in regards to unsolicited, “pre-approved” credit offers do not count as inquiries that can damage your credit score.

-        Types of credit in use (10% of total score):  Your FICO score takes into account all of your credit cards, finance company loans, mortgage loans, and retail accounts that are currently active and in use.

While most companies will use the FICO score to determine your credit worthiness, not all companies use it.  Some use their own variations of the FICO score, calculated using various formulas the companies have devised to emphasize more specific elements that go into formulating your FICO score.

Which Credit Report is Best?  (More Money Makers, it all depends)

Other companies will rely upon one of three main credit bureau reporting agencies to learn whether you are at a higher risk of failing to pay your debts on time or not.  These credit reporting agencies are Equifax, Experian, and TransUnion.  They can be found at http://www.equifax.com/, http://www.experian.com/, and http://www.transunion.com/, respectively.

>>>>>>>>>>>>>>>>>Check out Credit Monitoring Dirty Secrets<<<<<<<<<<<<<<<<<<<<<<<<<<

They use their own variations of the FICO score formula to determine your credit scores, and hence, your credit worthiness to creditors.  These numbers can vary based upon their own individual calculation models, as well as differences in your credit report.  One credit bureau reporting agency may have already received an item in your credit history that another reporting agency did not receive yet, such as defaulting on a car loan.  The credit agency that received that information and factored it into your credit score will show a lower credit score than the agency that had not received that information yet.

Hmmm… Is 690 a good credit score maybe just depends…

As you can see, there are many credit score models that creditors can use to determine your credit worthiness.  You can also see that it takes a considerable amount of effort to keep track of your credit score, but that it is worth it because you need to ensure that you are getting the lowest interest rate you can on the loans you apply for.  If you don’t know your credit score or if the credit report has an item on it that is untrue, you may be paying a higher interest rate than you need to, costing you more money in the long run.

Last But not Least the FREE CREDIT REPORT, but it doesn’t have credit scores

While there are many sites that claim to provide a free report of your credit scores, only AnnualCreditReport.com will provide you a free credit report from each of the three major credit bureau reporting agency.  BUT YOU WILL NOT GET A FICO SCORE. You can gain one free credit report from each agency over a 12-month period at http://www.annualcreditreport.com.  You can choose to request all three credit reports at one time in order to compare them, or, as many experts suggest, you can request one from each agency every four months in order to monitor your credit score and history throughout the whole year without having to pay for them or sign up for a trial offer of some service as virtually every “free credit report” website requires you to do.

Hmmm…Is a credit score of 700 Good… maybe just depends

As you can see, having a good FICO or credit score is especially important in order to obtain the lowest interest rates on your car loans, mortgage loans, credit cards, and other financial instruments you apply for.  There are many different credit scoring models that companies use to determine your credit worthiness.  This is just Insurance, they don’t tell you that but if you have a pre-existing condition(debt/late payment/bankruptcy) no credit.    It is important that you monitor your credit history and scores via the free credit report service at AnnualCreditReport.com to ensure that your credit report is accurate and that you are getting the lowest rates of interest possible on the loans, credit cards, and other financial instruments you are applying for.  By carefully monitoring your credit history and scores, as well as following good credit practices, you can be sure that you will receive the lowest rates of interest available to you when you apply for car loans, mortgage loans, credit cards, and other financial instruments.

What is a Good Credit Score all depending on who you are dealing with and what you need credit for.  So companies still believe in relationships.

I personally have the credit monitoring service thru my bank USAA.  I have some images to show you.

Three Credit Reporting Companies – 3 different scores. (BUT HERE IS THE KICKER, none of these are my actual CREDIT SCORE), I will write another article covering how that works so stay tuned for Credit Monitoring Companies Lies.

Is 690 a good credit score?

Is 696 a good credit score?

Is 709 a good credit score?

 

 

 

As you can tell I am not to keen on the credit scoring industry.  You can never get a straight answer to the question

What’s a Good Credit Score – Excellent Jeff Rose

Please if you can find the definitive guide and accurate answer leave a comment.