Your credit score, your understanding, a review
Posted by Mords1944 on May 9th, 2020
Term credit score was not a household word used in our everyday life just a few years ago. Although some people understood the phrase and its purpose, most people had no reason to understand what their credit score was and how it affected their chances of getting a low interest rate loan. Most people had a job and could pay the bills so they didn't have to worry about credit. Not to mention identity theft these days.
However, in the society in which we live today, with increasing identity theft, loss of jobs, foreclosures, bankruptcies, etc. Few people have not heard the term credit score.
Your score is accent a number between 300 and 850. It is determined by your past credit habits as well as current credit habits. The way you handle it, if you pay on time, if you have missed a payment, if you are exceeded, all are factors that determine your score. The lender uses it to characterize an individual's credit value. How likely is it that you can or will pay your debts. Credit scores are based on what any lender has a loan through reporting to credit bureaus, good or bad.
Lenders, such as credit unions, auto finance companies, mortgage companies, and credit card companies, use credit scores to calculate the possible risk they pose to you if they grant you a loan. These companies use their credit scores to decide if you meet the criteria for a loan, at what interest rate you will have to pay the loan, and how much they will allow you to borrow.
FICO is by far the most recognized credit score in the US. USA BTW, if you didn't know what FICO means, it's (Fair Isaac Corporation). Almost every lender I know uses their FICO score because they provide the best-known and most reliable credit rating system in the US. USA
Any information in your FICO file will be used by the loan community.
In addition to the FICO score, there are three main credit reporting agencies in the US. USA Equifax, Experian and TransUnion, and each has its own formula for calculating your credit scores.
The method used to produce your scores is regulated by the federal government. Regulation B of the Federal Reserve Board, which implements the Equal Credit Opportunity Act, expressly prohibits a credit rating system from taking into account anything such as race, color, religion, national origin, sex, or marital status. It also stipulates that credit rating systems must be "equal for all" and "statistically sound".
In addition, if you are denied credit for any reason, you must be provided with a detailed explanation of why credit was denied. They can't just tell you that your score is too low. They must be specific in the details of the denial; Something more like "too many late payments of 30 days or more" is how you should be presented when correcting.
Although we don't really know the exact formulas for calculating the Shop Simplio Credit Score, it is a closely guarded secret, Fair Isaac Corporation has provided the following information as part of its formula.
35% past due payment (30 days past due)
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