What is a Credit Score?
A credit score is a numerical representation of your statistical likelihood to repay credit that is extended to you. Scores range from 350-850. The credit score comes from a propriety model developed by Fair, Isaac & Company (FICO). The model takes all the detail account information from your report and processes it with different weights and scoring factors, resulting in the score.
A credit score is a number that reflects your risk level, as an individual consumer, as determined by a scoring model or formula. The higher the number, the lower the risk will be to the lender. As you apply for increased credit or attempt to make a purchase, the lender will check your ability to pay back that loan. The more negative marks you have on your credit report, the less likely you will be granted the loan or purchase you requested. The score generally ranges from 350 (lowest) to 850 (highest). We at Credit Repair Consultants believe this area to be so important that we have written the “Credit Repair Consultants’ Guide to Your Credit Score”. This comprehensive and easy to understand guide you will teach you everything you need to know about the subject.
Your credit score (sometimes called a FICO score) is a measure of your ability to obtain credit. It is computed using a proprietary formula developed by Fair, Isaac and company, and is expressed as a number between 300 and 850, with a higher score meaning a better ability to obtain favorable credit terms. Credit scores above 720 are generally considered to be near-perfect credit, while scores below 620 indicate sub-prime credit. The average credit score is around 680. If your credit score is less than what you would like it to be, there are steps you can take that will quickly improve it. The most important thing is to pay your bills on time. One of our mortgage officers will be happy to review your credit reports and credit score, and provide additional tips for improving your credit.
Credit scoring is the method of rating, or scoring your credit history. These scores are now being used by credit grantors as a tool in determining risk factors in lending. The risk with mortgage loans is, of course, foreclosure. Although the lender has significant collateral with the lien placed on your property, they are not interested in owning that property. The credit scores give the lender a method of predicting the risk associated with your loan. There are three major credit bureaus which have credit scoring models. FICO was created by Experian or TRW. Beacon scores are from CBI/Equifax and Empirica comes from Trans Union. These models differ somewhat but all can be used by a mortgage lender in determining risk. Derogatory credit information weighs most heavily on credit scores. Late payments, collection accounts, charge offs, judgements, bankruptcy and foreclosure will severely lower your credit scores.
