What is a Credit Score?

A credit score is a statistical analysis of your credit habits as they appear on your credit report. While all credit agencies and lenders use a different formula, putting emphasis on different parts of your credit history, your credit score should be equivelant at all.

This number is commonly referred to as the FICO number, named after the Fair, Isaac company who developed this universal credit score with Equifax, Experian and Trans Union, who are the three big credit reporting agencies.

The different parts that make up your credit score include paying your bills on time, how often you carry balances and how high they are, and how often you pay balances off in full each month.

The higher your score is, the better. A score of 650 or higher means you are a relatively secure credit risk when looking at you and your credit for a loan. If your credit score is 600 or lower, you may find it much more difficult to get approval for a loan, especially for higher dollar amounts, and you may find the terms and interest rates you are offered are not nearly as good as if your score was higher.

Your credit score is not included when ordering a free credit report. But it is always smart to check to see what your credit score is before applying.

You can order your credit score online here.

When you review your credit score, if you find you are in the low 600 range, it makes sense to try and improve upon that number before applying, to increase your chances of an approval as well as better terms and interest rates.'

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