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Credit Report Scoring

What is credit report scoring?

Credit report scores are often used by lenders as a predictor of how likely you are to repay your loans. A credit score is generated by a mathematical formula utilizing the data from your TransUnion, Equifax or Experian credit reports. Lenders have been using credit report scoring as part of lending decisions for more than 20 years.

What factors influence credit report scoring?

Various factors affect credit scores, including the following:
  • Payment history
  • Number and types of credit accounts
  • Length of credit history
  • Severity and frequency of negative credit information, such as bankruptcies, charge-offs and collections
  • The percentage of credit used compared to the total credit available

How does my credit score affect me?

Your credit report score can be an important indicator of your financial health. Lenders may use your credit score to determine:
  • Whether or not you are a good candidate for a loan
  • What type of interest rate you will pay
While your credit score is frequently used in assessing your creditworthiness, lenders also examine the information on your credit reports and your loan application. Regularly checking your credit reports enables you to:
  • Be informed of the most up-to-date information in your credit history.
  • Correct any inaccuracies, to make sure that your credit data is a true depiction of your credit record.
  • Be aware of whether your credit behavior is affecting your chances of receiving credit under the best possible terms.

What is a "good" credit report score?

There are many types of credit report scores that rely on different mathematic algorithms and predict different behaviors, such as the probability of delinquency or default. Under many credit scoring models, the higher the numeric score, the better. Each lender decides what credit scoring model(s) it will use, and what range it considers to be a good credit risk or a poor credit risk. For this reason, the lender is the best source to explain what your credit score means in relation to the final credit decision. After all, each lender or creditor determines the criteria used to extend credit. The credit score is only one component of information evaluated by lenders.
Now that you know more about what good credit can mean for you,
get your credit report & score.
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