Minggu, 07 April 2013

What is my credit score?

A credit score is a number that gives an indication of a person’s ability to meet financial obligations, especially loan repayment. It is usually used by credit institutions for the estimation of the borrower’s credit risk. The higher the score, the lower the risk involved for the lender.

A credit score is a three-digit number and a rating-R. The R rating is a scale from 1 to 9 and is based on your payment history. R1 is the best rating and View pay bills on time while R9 is the worst. The three-digit number is an indication of your ability to repay the debt.

Factors that affect your score are:

· Payment history: If you have a history of paying bills on time, your credit score is likely to be high.

· Amount of credit due: a high amount of debt reduces your score.

· Credit usage

· Credit experience

· Credit types established

· Acquisition of new credit

What is my credit score and how is it calculated?

The methods used to calculate the score are complex and vary from one credit Bureau to another. The most known is the FICO scoring system, which ranges from 300 to 850. Is a risk-based system that values the ability of a borrower defaulting on a loan from a lender. Is retroactive in nature, meaning that reflects the past ability to pay their bills, which is usually, but not always a true picture of your future ability to pay based on your circumstances. Credit agencies also have their own scoring systems, which are sometimes combined with the FICO system. We have developed new systems for future capability-based score of debtor to pay.

The score range varies from one system to another. For example, while FICO score ranges from 300 to 850, the VantageScore score ranges from 501 to 900. This means that a person might have different scores at the same time, based on the system used.

Tidak ada komentar:

Posting Komentar