What You Need To Know
About Credit Scores and Reports

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What about credit scores? It seems like the entire world is going through a credit crisis, so you are not alone. Why? Well the truth is that many people do not understand their credit ratings and how they are put together. We certainly didn't. When you are learning about credit and credit scores there is a lot to understand.

The first thing that you need to know about credit scores is that they are what lenders look at to see if you are worth lending money to.

Generally lenders want to know that you are a good financial risk. The score that displays this is known as your FICO® score.

Your FICO® scores are what is known as your credit reports scores. Each person has three credit reports scores.

One from Experian, one from TransUnion, and one from Equifax. These scores are created from information that the credit bureaus have kept on you. Given the fact that this is a living and breathing record it can often change which will directly affect your credit score.

Why should you care About credit scores? Credit report scores dictate how much money lenders are willing to lend you. They also affect the loan terms on that money. Better credit scores get better interest rates.

When learning about credit scores you may start to wonder what FICO® means. It actually stands for the software that is used to calculate your credit scores.

Fair Isaac and Company is actually the group responsible for the software, and it has proven to be the best way to calculate the risk for lenders.

Essentially the higher your credit reports scores are the lower the risk to lenders and vice versa.

However, a credit score will not completely dictate whether you are a good or bad risk it is typically a good indicator.

Now that you have a basic idea about credit scores, you will want to learn how to ensure that you have a good one. So what's my credit score?

Well credit reports scores range between 300 and 850 points. Generally if your score is 700 points or higher you are considered to have a good credit score, but really as long as your credit score is above 650 points it is typically acceptable. So how do you get that? The best way is to stay on top of your bills. You should pay them on time, keep your overall debt low, and refrain from maxing out your credit cards.

Be sure that you check your credit reports scores occasionally. There are instances where errors can occur and you want to be sure that you deal with any of these before they negatively affect your overall financial profile and ability to obtain credit.

Generally if there is an error on your credit report they are easily removed. However, unless you check for them you cannot take care of them.

Your credit reports scores do not have to be a mystery. Thankfully credit scores are easier to understand than you might have originally thought, and the best part is that you have control of them.

So now that you understand, you may want to get your credit score and see for yourself.

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