Credit Scores - Common Questions
What is a credit score?
** It's a 3 digit number, the higher the number the better
** It is a statistical equation, and used to assess credit risk
** It's used to see who qualifies for a loan and what type of interest rate they qualify for
What is used to determine my credit score?
** Some of the information included in determining a credit score is: payment history, amounts owed on accounts, length of credit history, new credit, types of credit used
Who uses a credit score?
** Lenders, employers, utility companies, insurance companies, cell phone companies, etc.
Aren't the credit reports ordered online the same report as the lender gets?
** No, the online report ordered by consumers uses different formulas than the credit report that lenders get.
Isn't there only one company who provides credit scores?
** No, there are three different major companies. Equifax, Experian, Trans Union. Each one may score data in a different way. All scores are not created equal.
Aren't all credit scores the same?
** No, depending on the type of loan someone is applying for, the scores will vary. As an example, auto loans will weigh auto payments more heavily.
What is an average score?
According to Experian, the US Average credit score is 692.
What is a Credit Score Simulator?
** There are online sites, including one at True Credit that have tools showing how certain actions may affect a credit score.
