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The official government website is located at www.AnnualCreditReport.com. You can receive a copy of your credit report free annually. However, it will not include your credit scores.


Do You Know These Things About Your Credit Scores?

Some people think they know all about their credit scores and are wrong, and then others just admit that they don't have a clue about their credit rating and how it gets to be what it is.

The world of credit can be very confusing and this confusion can lead some people into trouble with their credit rating.

Here are a few things to help you become more knowledgeable about your credit scores.

What really is your credit score?

Credit scores that most lenders use to determine approval of your loan request are called FICO scores.  These FICO scores range from 300 to 850 and you have three scores at any given time (one from each of the three major credit bureaus). 

These three credit bureaus use their own proprietary formula to calculate your credit scores from the credit data that has been reported to them by your previous lenders.  They then sell these FICO scores to lenders who use them as a guideline to determine if they wish to extent additional credit to you the borrower.

Actually each of the credit bureaus have a separate name for these scores, even though the general public calls them all "credit scores"; Transunion calls these scores Empirica, at Experian they are known as the Experian/Fair Isaac Risk Model and within Equifax they are known as Beacon Scores.

If they credit scores you have aren't call FICO or one of the credit bureaus in house names then it's not a FICO score.  You could be looking at a VantageScore which is a competitor to the FICO.

As a consumer you can purchase your Equifax and TransUnion score from myFico.  Unfortunately Experian no longer sells their FICO score to the consumer.  A lender is still able to purchase these scores and use them to determine approval for credit but you the consumer are no longer able to purchase their score.

More Debt does NOT necessarily mean better credit.

Credit Bureaus do not reward consumers who pile on the debt.  For instance, if you have a credit card and you have it continually maxed out then this is viewed more as a negative than as a positive.  On the other hand if you keep your balance at around thirty percent of your credit limit and you make your payments on time each month then you are viewed as a good credit risk and this fact is reflected in your credit scores.

If you have no credit whatsoever then you are also not regarded necessarily as a good credit risk because you have not established any history that you repay your debt if it is extended to you.

You do not have to pay a bunch of interest or carry a lot of debt in order to get and maintain good credit scores.  Simply get two or three credit cards and use them lightly and pay the balance due in full each month. 

Most people will add a car payment and/or mortgage payment to this which if paid on time will strengthen their credit scores even more.

Student loans will also count toward your credit scores but mainly this is debt that can easily get out of hand because most young people have not been trained to know what it will take to actually repay these loans and before you know it they are ruining their credit by being late with the repayments or , at worse, not repaying the debt at all.

The key to having good credit scores is to show a responsible use of the credit you have been granted and piling up debt is not smart or an indicator of being responsible with ones credit.

Credit Scores have no benefit for consumers.

It is true that credit scores were originally designed entirely to benefit lenders by helping them gauge whether or not someone will default of a loan that may extend to the borrower.

But that doesn't mean that credit scores have no benefit at all for the consumer.  Credit scores have opened lending up to be more global.  Not too long ago you where limited to getting a loan from your local bank because they were the only ones that might know you or your parents and be willing to risk lending their money to you.
Today, credit scores have opened up sources of credit from lenders who have never met you and are not likely to ever do so.  Good credit scores also allow you to get credit at a cheaper interest rate. 

Credit scoring has also eliminated much discrimination in the lending industry. 

Know Your Credit Scores

It is good to keep an eye on what your credit scores are and what all is being reported to the credit bureaus about your credit activity.

Reporting mistakes can be made and this could negatively affect your credit scores and you may not even know this until you apply for credit for that new car or home mortgage.

If you find your credit scores are low then you can take steps to improve them.

Learn more about your credit report and scores at: Free Credit Checks



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