Youve Been Probably Hearing A Lot About Keeping An Eye On Your Credit Score Ratings. They Say That A Good Score Can Mean Several Hundred Dollars Of Difference On A Mortgage, And It Is True. It Can Also Mean A Much Lower Credit Card Rates. But How Do You Know What Are Considered As Good Credit Score Ratings? And Who Does The Evaluation? Here, You Will Learn About Credit Score Ratings In General, How They Are Calculated, And Other Questions You May Have.How CalculatedHow Are Credit Score Ratings Calculated? Well, First Things First. A Credit Score Is A Number Based On Several Criteria. Such Criteria Are Often Predictive Of An Individuals Future Credit Performance, So That A High Credit Score Means You Are More Likely To Pay Your Bills On Time Than A Person With Low Credit Score.Thus, How Credit Score Ratings Are Calculated Will Depend On What Criteria Are Used To Arrive At The Value Of Your Credit Score. Criteria Include The Amount You Owe, Payment History, And Credit History. Credit Score Ratings May Also Be Calculated With Additional Factors Such As The Types Of Credits You Have, The Amount Of Available Credit, And New Credit Accounts. All These Things Can Be Found In Your Credit Report And All That Credit Reporting Agencies Do Is To Take Down These Factors, Assign Value To Them Based On Their Unique Scoring System, And Calculate The Value. The Result Your Credit Score Ratings Represents The Amount Of Risk You Pose To A Lender.The FICO ScoreThe Most Common Credit Score Ratings Used By Credit Reporting Agencies Nationwide Is The FICO Score, Which Stands For Fair Isaac Corp., A Private Company That Was The First To Develop A Ratings System To Calculate Credit Scores.The FICO Credit Score Ratings Have A Range Of 300 To 850, Representing The Levels Of Credit Worthiness. The Higher Your Score, The Better Loan Rates You Are Going To Get. According To A Report Made By Fair Isaac Corp., Majority Of People Have Scores Between 600 To 800. A Score That Is 720 Or Higher Is Considered A Good Score And Many Lenders Will Provide You With Favorable Interest Rates If You Have This. Credit Despite Low ScoreContrary To What Some May Believe, Having Low Credit Score Ratings Does Not Automatically Bar You From Applying For Credit. Many Lenders Still Approve Loan Applications Despite Low Scores. However, Considering The Risk They Are Taking, The Interest Rates They Charge Are Often Higher Than Those Of Individuals With Higher Credit Score Ratings. If You Are Looking To Improve Your Credit Score Ratings, You Can Start By Getting Your Free Credit Report From AnnualCreditReport.com. Often, The Reason Why Your Scores Are Low Is That There May Be Some Errors Or Inconsistencies In Your Credit, Which You Can Correct In Order To Increase Your Score.
