Credit Report QuickLink:

Credit Basics

•	Types of information on a Credit Report
•	Credit Scoring made simple
•	What goes in your score?
•	What to look for on your report?
•	Credit Reporting 101
•	Dispute basics
•	What Is Credit and How Does It Work?
•	What is a credit score?
•	Why Should I Check My Credit Report Regularly?

Debt Management

•	Establishing & rebuilding your credit
•	Thinking of cleaning up your credit? Think again.
•	Untying the knot
•	Different types of bankruptcy
•	Is bankruptcy right for you?
•	Rebuilding your Credit
•	Debt to Income Ratio
•	Debt Collectors
•	Debt Reduction
•	How Do Major Life Events Impact My Credit?
•	How Can I Establish or Rebuild Good Credit?

Buying Power

•	First-time home buyers tips
•	Home equity basics
•	Auto buying
•	Choose the right credit card for you
•	Why your credit cards could be declined
•	Getting the best Credit Card deals
•	What Are My Consumer Credit Rights?
•	How Should I Handle My Credit to Prepare for the Future?

Privacy and ID

•	Watch out for credit card scams
•	Common Online Fraud Schemes
•	Phishing
•	Fighting Identity Theft
•	What is credit fraud?
•	Fraud Prevention Tips
•	Why should I worry about credit fraud?

Credit Scoring made simple

It's your right to know what credit scoring agencies are saying about you. Finding out this information is doesn't cost a lot and takes only minutes to do - which may be time very well spent.

So what is credit scoring?
Simply put, credit scoring is a method of assessing the credit risk of a loan applicant. It uses mathematical models to evaluate a person's credit worthiness based on their credit history and current credit accounts. The system was first developed in the 1950s, but has come into widespread use in just the last couple of decades.

In the early '80s, the three major credit bureaus (Experian, Equifax and Trans Union) each developed scoring models that allowed them to offer a score based solely on the data of one individual. Creditors, especially those in the home mortgage industry, frequently use these scores when deciding who gets a loan and at what rate. However, it's worth remembering that creditors also consider other information, such as your salary or employment history, when making loan decisions.

What's in a score?
Credit scores are reported as a number, usually in the 300-900 range. The higher the number the better the score. Creditors see the number as an indicator that an individual will repay a loan. Typically, scores are determined by reviewing the following data:

Your history of late payments
Non payments
Current level of debt
Types of credit accounts
Length of credit history
Number of credit inquiries
History of applying for credit
Bad credit behavior, such as writing bad checks

Personal details such as race, gender and religion are definitely not considered when determining your score. It's also worth noting that each major credit bureau has its own method for calculating credit scores. However, the scoring models have been fairly well standardized so that a "600" score at one bureau is roughly the equivalent to the same score at another.

What's a good score?
Overall, a score of 650 or above is a sign of very good credit, and a very good credit score. People with scores of 650 or higher will, all things considered, have a good chance of obtaining quality loans at the best interest rates.

Scores of 620 to 650 indicate good credit, but also may point to potential trouble areas that creditors will want to look at and review. A lender may require additional documentation before a loan will be approved.

With scores of below 620, consumers may find that they can still obtain a loan. However, the process will be lengthier and more involved, as creditors consider scores below this threshold to be an indicator of greater credit risk.

Credit report monitoring
does not lower your
credit score!