Summary Of Credit Report And Credit Scores
Your whole credit history such as your credit cards, auto loans, student loans, medical bills, mortgage loans, department store credit cards, collection accounts, charge offs, judgments, tax liens, late payment history, and debt settlement histories are all gathered into a data bank by all credit reporting agencies into a single report known as your credit report. All the information compiled in your credit report is analyzed and given a numerical value known as a credit score. Your credit report and credit scores are what creditors and lenders will primarily take into consideration in whether they will grant you credit or a loan and if they do decide to approve you for credit or a loan, then what rate and terms they will offer you depends on how good your credit report and credit scores are. Your credit report and credit scores will determine the risk factor the creditors and lenders take into account.
Credit Report And Credit Scores: Risk Evaluator
Whenever you apply for credit, a creditor or credit issuer will check your credit report and credit scores. The creditor then will review your credit report for your payment history and/or your credit scores to see what type of risk level you are. The lower your credit score, the higher your risk level is and the more of a chance of you defaulting on your obligations: This is how creditors judge your risk tolerance. The lower your credit scores, the higher interest rate you will be paying. Utility companies also check your credit report and credit scores and the lower your credit scores are, the higher deposit they will require. For those with stellar credit scores, a deposit might not be required.
Your Credit Report: Transunion, Experian, Equifax
Your credit report contains everything about your personal and financial information such as where you live, where you work, your prior residential history, your prior employers, your date of birth, your social security number, your payment history with every creditor you had in the past 7 or more years, public records such as bankruptcy, foreclosure, judgment, deed in lieu, short sale, collections, charge offs, liens, tax liens, child support delinquencies, and other public and private information. The three major credit reporting agencies is responsible to maintain your credit reports.
Credit Reporting Agencies: Transunion, Experian, Equifax
The three credit reporting agencies collects consumer’s personal and financial information from creditors and creates a credit profile for virtually everyone. This information is gathered and sold to creditors who requests credit from you and the creditors uses this information to make a credit decision on your credit request. Creditors pay a fee for each credit request from the three credit bureaus: Transunion, Experian, and Equifax.
If you have credit from creditors and lenders, these creditors and lenders will report your credit information and your credit payment history to the three credit reporting agencies and your credit history is then established. On time payments, late payments, credit limits, credit balances, credit inquiries, collections, and charge offs are all reported by the creditor and it becomes part of your credit history for future creditors and lenders to view.
Your Credit Scores
Your credit scores are scores that each of the credit reporting agencies derive from your credit report. Your credit report and credit scores are the two factors a creditor and lender will use to determine your credit risk tolerance in them granting you credit and the interest rate they will charge. Your credit scores will fall somewhere in between 300 to 850 and each of the three credit bureaus have their own formula in calculating your credit scores. You will normally have three different credit scores. The higher your credit scores are, the less of a risk you are under the creditor’s view and will get the most favorable terms and rates.