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Credit Score Understanding

Credit Score Understanding

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Published by: The_Burb on Dec 22, 2011
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12/22/2011

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A guide to helping you understand your credit score
UNDERSTANDING YOUR CREDIT SCORE
 
UNDERSTANDINGYOUR CREDIT SCORE
A guide to helping youunderstand your credit score
 
A guide to helping you understand your credit score
UNDERSTANDING YOUR CREDIT SCORE
Table of Contents:
Understanding your credit score 1How much does a low score cost you 2How are credit scores calculated 3Cracking the code 7Improving your credit score 9
The trusted leader in credit report repair.
Call today:
866-683-3950 ext 0
 
A guide to helping you understand your credit score
UNDERSTANDING YOUR CREDIT SCORE
Understanding your credit score
Fair Isaac Corporation, based in Minneapolis, Minnesota, was ounded in 1956 by Bill Fair and EarlIsaac. They pioneered the eld o credit scoring or nancial companies. Over the years they haveexpanded their enterprise to cover decision systems, analytics, and consulting. Every credit reportingagency, and most lenders, calculate your credit score based on sotware rom FICO®, a division o FairIsaac, or based on in-house sotware modeled ater the FICO® rating system.
What does your credit score mean?
This rating system is meant to develop a snapshot o the risk you currently represent to a lender.Several parameters in your credit le, including length o credit history, number o open accounts, loans,mortgages, public records, and others are ormulated to produce a three-digit score between 300 and850. There are other scores used by lenders and insurance companies (some o which are developedby FICO®) such as Application and Behavior scores. These other scores take other inormationinto account. Usually a lender will use a combination o your credit score with other actors whendetermining your risk. They all have the same objective, to determine the borrower’s potential risk.Regardless o whether the score was generated by FICO® or a system based on FICO® parameters,they all yield an industry standard three-digit score. This score places the borrower in one o three maincategories (we named the third one ourselves).
Prime, sub-prime, and shafted
Prime:
I your credit score is above 680, you are considered a “prime borrower” and will have noproblem getting a good interest rate on your home loan, car loan, or credit card.
Sub-prime:
I your credit score is below 680, you are “sub prime”, and will likely pay a much higherinterest rate on your loan.
Shafted:
Below 560 is the shated score. At least that is how most lenders and credit issuers perceiveit. You can still get a credit card but you will likely be hit with a security deposit or high acquisition ees.In addition to that, your interest rate may likely be between 15 and 23%. With this score, you can orgetabout most home loans and the majority o new car loans. Below 560 is no place to be. You may paymuch, much more in higher interest and unnecessary ees. You may even pay more or your insurancerates. A very low score may even prevent you rom getting a job with many companies.
The trusted leader in credit report repair.
Call today:
866-683-3950 ext 0
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