Your Credit Questions and Answers

Why is your Credit Score Important? Your credit score is a measure of your creditworthiness and financial stability, based on the information contained in your credit report. It is used by lenders, landlords, and other organizations to assess your risk as a borrower or tenant.  A higher credit score can make it easier to qualify for loans, credit cards, and other financial products, and may also result in lower interest rates and fees. Your credit score is important because it can affect your ability to borrow money, rent an apartment, or even get a job. Your Credit Score is also used by insurance companies to determine your premiums and by utility companies to determine your deposit requirements. In short, your credit score can have a significant impact on your financial opportunities and well-being. It is important to build and maintain a good credit score by paying your bills on time, keeping your debt low, and protecting your personal information from identity theft. Who Can Access

  What is difference between your Credit Report, Fico Score, and your Credit Karma Score? Your Credit report is your history of borrowing that has been submitted to at least one of the three credit reporting agencies (Equifax, Experian, and Transunion).   I always just check my Credit report by using Credit Karma. You can do it every day if you want and it will not affect your score. Your FICO score is a number between 400 and 850 that is calculated using your reported history.  FICO stands for the Fair Issac Company that first came out with a numbering system to rate your credit worthiness.  There are lot of different credit rating systems that banks use to evaluate your credit.  The Vantage 3.0 scoring model is used by Credit Karma and many other services and will be close to your FICO score.   

What is Credit? Credit is your proven ability or inability to make payments over time and make your payments on time. What is your Credit Score? Your credit score is a number that comes from a formula applied to your credit history. This formula is used to estimate the likelyhood of you missing a payment in the next year. How Credit Scores are Calculated In the United States, there are three major credit reporting agencies (CRAs) - Equifax, Experian, and TransUnion - that collect and maintain information on your credit history.  There are a few different methods use to calculate your credit score, but they all consider similar factors, including: Payment history : This accounts for a large portion of your credit score and reflects whether you have made your payments on time. Late or missed payments can have a negative impact on your credit score. Credit utilization: This refers to the amount of credit you are using compared to the amount of credit available to you. Using a high percen