A credit score is, simply put, a three-digit number assigned to a person in the United States that a bank or lender uses to determine whether or not they (the lender) will give you a loan or a line of credit. A credit score is vitally important to consumers in America because it will allow them to purchase a car, a home, or even get a student loan.
Most lenders use three different numbers to determine the risk they take when lending a person credit. These are called FICO scores, and they come from three different credit bureaus: Experian, TransUnion, and Equifax. These three credit bureaus keep credit information on people, and thus when lenders want to see how much risk they would be taking if they lend people money, they turn to these bureaus for data. For a FICO score to be determined exactly, the bureaus must look at accounts of yours that have one account open for at least six months that has also been updated in the last six months, too. This will guarantee the bureaus that there is sufficient information on your credit and financial history in order to create the FICO scores. Please keep in mind that lenders may also use their own scores that are based on their own criteria when lending.
FICO scores are not the only scores used sometimes in the lending process. Finding out your own personal FICO and credit scores used to be a tough task. In 2001, however, consumer rights groups and consumers put a lot of pressure on the US congress to make these scores easier to retrieve. The result was the ability to find out your own score for free through various credit reporting agencies and services. FICO scores change over time, and at each credit bureau, your score may be very different from the next. Your scores may change from month to month or year to year. it depends on your financial position at the time.
If you are establishing credit, it is vital that you check up on your score. You can do this twice a year for free thro ugh the federal government. Checking your credit score and report wil l let you in on what companies think of you, and how your credit is fairing in the world today.
If you have more question please do your research because your credit score is very important.
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