Credit Reports and Scores

If it is good the person is likely to receive the credit that they were looking for, but if it is not they are likely to be turned down and not offered any form of credit at all. Everyone in the United States will have their own credit file and this is an analysis of their credit worthiness. The information that is on a credit report will come from credit bureaus and is used by banks, credit card providers and other lenders to determine whether or not a person should be given credit.

If you would like more information on credit scores and reports here are a few facts and websites that can help you to find out what yours is and why it is so important.

What Are They?

As mentioned credit reports and scores are the statistical analysis of your credit worthiness based on your financial behavior. For example if you have a loan and you make all of your repayments on time each month this will reflect well on your credit score. However if the opposite is true and you miss payments and pay late your credit score will be damaged and go up. Credit scores are also based on the amount of credit a person has, the amount of credit they have had, their outstanding debts if they have any and their history of repayments. So as you can see a lot of information goes into compiling a person's credit report and scores.

FICO is the main credit scoring system that is used in America and the scores that are produced by FICO are used by Equifax and TransUnion when they want to know what someone's credit score eight. The range of credit scores used by FICO are between 300 to 850. If a person has a FICO score that is below 600 they are seen to be in the high risk borrowers category, this means that these people are highly unlikely to get any form of credit at a good rate of interest. They may still be able to obtain credit however this will be from a specialist lending company and will attract high fees and high rates of interest. If a person scores over 720 on FICO score their rating is seen as excellent and these are the people who will be most likely to be able to obtain many different forms of credit.

There are of cause other credit scores that are used such as VantageScore and the PLUS system that has been created by experience however these are quite confusing to consumers and are not regularly used by lenders.

Check Yours Online

Anyone is able to check their own credit reports and scores online and everyone should do this on a regular basis in order to see how they are doing. When you check your credit report you are able to see every form of credit that you have had in the past as well as credit that you currently have. You will be able to see how you are performing in relation to your credit and get an idea of your creditworthiness.

It is recommended that before you apply for any form of credit you find out what your credit reports and scores are. By doing this you will ensure that you are not applying for any form of credit that you are likely to be rejected by. Remember that even if you are rejected for a form of credit your request an application will be held on file and the more applications for credit you make the more damaging to your credit score it will be. So as you can see it is vitally important that you make sure that you keep up-to-date with what your credit score shows and make sure that all the information on it is correct.

If you find anything on your credit or that is not correct you must contact the credit bureau and have this problem rectified. Often when a person has paid off a loan or credit card it can still show as an outstanding form of credit. This makes it look as though you still have a loan or credit card that is in use, even if it has been paid off and the balance is showing at zero. If you find it on your credit or make sure you get in touch with the relevant organizations and have it removed or you could find that it hinders your progress when it comes to applying for credit in the future.

You'll be pleased to know that there are plenty of free credit reports and FICO scores online that you can access in order to get the information that you are looking for. Take a look at the website below and you will get help and advice on how you can check your credit report underscores in order to make sure that everything is up to date and correct.

Further Online Help

As mentioned you should take the time to look free credit reports and scores in order to make sure that yours is accurate. When you know what your credit score is you can apply for credit in confidence without the worry of something being on your credit report that you are unaware of.

AnnualCreditReport.com: https://int.annualcreditreport.com/cra/index.jsp is a website through which you can request your credit report. The site is sponsored by Equifax, Experian and TransUnion and you are able to take a look at your credit report once every 12 months.

Freecreditreport.com: http://www.freecreditreport.com/ is another website where you can quickly and easily find your credit report for free. You can also have the option of paying one dollar to have your credit reports and scores sent directly to your phone.

So before you even think about applying for credit make sure that you have checked your free credit and scores to know what yours say about you.