01 Apr


A credit score is basically a numerical value calculated by an entity to represent an individual's creditworthiness, usually based on his/her credit reports. Generally, a credit score is calculated based on credit reports submitted by a person to the credit bureau. Information usually based on credit report could be obtained from credit agencies. Learn more about Credit Score from here. Credit score calculated are widely used in the decision-making process of lenders and credit card companies.
The credit scoring techniques are based mostly on the credit history and repayment record of an individual or company. Credit scores are also affected by a company's or an individual's credit history. Credit scoring techniques are very complicated, and they involve several factors that have an impact on credit score calculation. Some of these factors are as follows: the amount of credit applied for, duration of credit used, types of credit applied for, types of credit received, number of inquiries made, and whether there have been any disputes filed against the credit report.
Most of the time, consumers are not aware of their credit scores and do not take necessary steps to improve it. Most consumers would just check their credit report once a year to know if they are on the right track. This is not enough! All consumers need to keep track of their credit scores at least once a year. Monitoring credit scores will allow you to identify any changes and make necessary actions to amend your credit situation.
It is advisable for consumers to subscribe to a credit history monitoring service to get alerts whenever there is a change in their credit score. These services provide detailed information on credit scores. They also provide reports on their credit status every month to the customers. Through subscription, consumers can easily track changes in their scores. Moreover, you will be able to understand how important it is to maintain your scores since higher scores mean better chances of getting credit available at lower interest rates.
One of the most widely used methods of calculating credit scores is the FICO scores. This is because it has a proven track record of predicting future creditworthiness. Besides, it is also the oldest method of calculating credit scores. The FICO score uses numbers and letters to determine consumer creditworthiness. Visit this credit site to get more about Credit Score. FICO stands for Fair Isaac Co, a company which bases its method on mathematical calculations based on information from credit reports and financial transactions.
When credit score calculation is based on information from credit reports and financial transactions, it is primarily based on credit worthiness. Credit worthiness refers to the capacity of a consumer to pay on time. In essence, it is the level of risk or danger that a potential credit borrower poses to the lender. Since it primarily based on credit worthiness, it cannot be affected by recent economic circumstances. Learn more from https://www.encyclopedia.com/articles/how-to-check-my-credit-score/.

Comments
* The email will not be published on the website.
I BUILT MY SITE FOR FREE USING