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| Feb 8, 2012 | |||||||||||||
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Credit Score Guidelines
There are different methods of calculating credit scores. FICO is a credit score developed by Fair Issac Corporatio. It is used by many mortgage lenders/banks as well as other institutions that use a risk-based system to determine the possibility that the borrower may default on financial obligations to the mortgage lender/bank. The credit bureaus all have their own credit scores: Equifax's ScorePower, Experian's PLUS score, and TransUnion's credit score, Americans are entitled to one free credit report within a 12-month period from each of the three agencies. The users can get their free credit report, normally without credit scores. Credit scores are available as an add-on feature of the report, for a fee.
Top Three Ways to Boost Your Credit Score
The average American's credit score is 723. Having a high credit rating can give you better interest rates on credit cards, car loans and even your mortgage. It's important to know the top factors that affect your score and check your credit report for accuracy.
1. Pay on Time The most important factor to a potential lender is whether or not you will pay your bills in full and on time. 2. Use a Variety of Credit A variety of credit, such as mortgage loans and credit cards, can show that you are responsible for paying back both large and small financial promises. 3. Keep Accounts Open It is a bad idea to open a credit card just to take advantage of a discount or a freebie then close it right away. The longer your credit history, the higher your credit rating tends to be. To see all of the factors that affect your personal credit score, you should check your credit report. A credit score is primarily based on information, typically from one of the three major credit bureaus: Experian,TranUnion, and Equifax. |
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