Three Free Credit Scores – The Measure Of Your Creditworthiness
In Credit Score of CreditGuru (March 30, 2009 4:27 pm)
A high creditworthiness is deemed very essential for anyone to get the loan approved. Indeed, the lender has to protect his assets and thus needs to ensure that you will not default when it comes to paying back. Information on the borrowers are provided by credit bureaus to the lenders. Past credit data is studied by these bureaus and every person is given a credit score. The credit score figure shows the credit worthiness of the person and the chances of the issuer of getting back the amount. The risk associated with a loan goes down considerably with an increase in the credit score. So if you are applying for a loan, it would be good for you to know about the three credit scores.
There are three major credit bureaus in the United States. The Experian, TransUnion and Equifax are these three credit bureaus. The job of these bureaus is to analyze individual credit data and calculate corresponding credit scores. Is it safe to issue a loan to this person – this is determined by this credit score. Different techniques are however often taken up for calculating the credit score by these three credit bureaus. As a result, the individual conclusions of these 3 agencies are often not the same. The credit score is generally calculated by an automated software. The Fair Issac Corporation (FICO) has made this software. Hence, credit scores are also known as FICO scores.
In an individual credit report, all these three credit scores are considered to come to a conclusion. The VanatageScore credit score is also calculated by all the bureaus, just like the three credit scores. The VantageScore varies in the range 501 to 990. The FICO credit score varies between 300 to 850.
Did you know that you can get the credit score and that too free? There are many credit report monitoring services of the credit bureaus, and you will need to subscribe to any one of them. The lenders can also have access to the detailed credit report of the borrower directly from these bureaus. Credit score of the borrower helps the lender arrive at a final conclusion about the loan application.
But why for all reasons should you know what your credit score is? Are you aware that often there may be an error in your credit score and so you should find out whether this has happened or not. Often the agencies would maintain your credit report for even up to 7 years and so you should definitely verify that the report is accurate. Thus, get informed about 3 credit scores, and learn where to go and what to do so that you can know about it. Yes, you should always know about this.
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