Credit Score?

Question

I don't understand what credit score is..can someone explain in very simple terms? and what a good and bad credit score is? How do you get a good score or a bad one??

Answer 1

Credit Score is calculated based on your credit history to give lenders a simpler "lend/don't lend" answer for people who are applying for credit or loans. The system awards points based on information in the credit report, and the resulting score is compared to that of other consumers with similar profiles. With this information, lenders can predict how likely someone is to repay a loan and make payments on time.

Although there are several scoring methods, the score most commonly used by lenders is known as a FICO because of its origins with Fair Isaac and Company. Fair Isaac is an independent company that came up with the scoring method and software used by banks and lenders, insurers and other businesses.

Answer 2

There is a wide variety of reports about you available to people you want to borrow money from or have financial interactions with, but the most largely adopted source is none other than Fair, Isaac & Co., (namesake of FICO) which developed the de facto credit scoring system used by some of the biggest lenders in the nation.

Companies like Equifax, Experian and TransUnion provide this information to financial institutions that deal with you and money to determine your creditworthiness.

Your creditworthiness determines what interest rate you’ll get for loans, or if you will be approved to rent an apartment. Maybe you’re starting to see how your FICO score can wreak havoc on your life!

Check your credit report FREE once a year
https://www.annualcreditreport.com

Check out how to improve your credit score here:
http://millionster.com/articles/debt/increase-fico-credit-score/

Answer 3

credit score is what lenders base your abilities to pay back a loan or offer credit to, other things like how much car insurance you will pay and how much interest rate your loan will be, a good credit score will give you more options for loans, credit applications and interest rates. Bad-opposite, will have higher loans, higher interest, higher payments or not qualify at all. You get a good score by not having alot of open accounts, paying on time and being an overall good guy. Bad score is exact opposite, always late on payments, no payments, too much debt. etc... higher 6 to 700 credit score is average.

Answer 4

there is no simple way to explain it really. the credit score ranges from 501 - 990. If your score is 500 you are less likely to get a good interest rate on a car/or purchase a car w/o a co-signer, less likely to get a loan say for a house- your probability are very slim unless you have a very good deposit or again co-signer. but if your credit score is say 900 you will be able to get any car with a good interest rate, you will be able to get a house, you will be able to apply for loans and be approved. you show that you can manage your credit by keeping your score high. you can do this by making payments to credit cards on time, not defaulting on any student loans etc


keep track of your credit score so you know whether you are on track for any big purchases etc.

Answer 5

Credit score is your credit history. So your history of paying billls like Electricity, heat, credit cards , loans etc. It all goes into data base. If you dont' pay bills on time. Your credit score lowers. If you pay bill on time you have better credit rating. If you ever went bankrupt. You have very bad credit and most won't give you loan or credit cards.

Answer 6

A credit (FICO) score is a number that lenders use to estimate risk. Experience has shown them that borrowers with higher scores are less likely to default on a loan. Scores are generated by plugging the data from your credit report into software that analyzes it and cranks out a number.

Answer 7

a credit score is a number from 450-900. this score determines how good you are with paying your bills on time , thru credit cards mostly. good credit helps u out in the long run for loans, buying cars and a home. lower ur score worse it is and the higher the better. credit score depends on how u mangae paying bills ontime or not. it is that simple.

Answer 8

While taking a decision on your loan approval, your lender will determine your credit score. The most common scoring method used is FICO scores. These ratings are usually used for determining your eligibility for mortgages. This

Answer 9

When you have credit like loans, credit cards...etc those creditors report to the credit bureaus: Trans Union, Equifax and Experian. The credit bureaus hold information for other potential creditors to see how well you pay your debt to see if they want to give you credit like if you want another loan, cc...etc.
Now, if you skip payments or stop paying that is when your creditors report them as being bad and that brings down your score. I believe a perfect score is 900.
Moderate score considered something under 700 or 650. To get a good score, pay your bills on time and don't skip payments. Don't open credit if you know you might not be able to afford it.
If you find that your credit score is bad...you can always go to www.orchardbank.com and get a cc that gives you a very low credit and pay on time...usually that helps. Having a diversity of credit helps. For example, mine is decent. I have a mortgage, car loan, school loan, 3 cc, a couple of bills...etc.
If you just pay your debt on time you shouldn't have any problems!

Answer 10

Its a rating that looks how use your finance credit (overdraft, loans, store cards, credit cards) and determines a rating, which potential leaders (companies that you wish to borrrow money from) to assess, as a means to give you credit.

If you have bad credit - they won't lead you the money
if you have good credit - they will lead yo the money