About Credit Ratings

What is a credit report?

A credit report is a report that tells a person's credit history. It includes the person's mortgage history, credit cards, bank loans and late payments, tax liens, and bankruptcies. It also includes how the person manages and uses money and their public records having to do with financial matters.

Why is all of this important?

All of this is important because it discloses some things that may reflect favorably or unfavorably agains the applicant. It tells lenders whether they should approve of a loan and what the rules should be, how long it will be, what the fee should be, or the rate the interest grows. A person with a good credit report is more likely to get a better rate of interest than someone with a bad credit report. A bad credit report may result in the loan application may be denied altogether.

What is a credit score?

A credit score is a method of estimating the worthiness of a person's credit. Some of the information used to make this score is your amount of debt, type of credit used, bankruptcies or late payments, and collection accounts. The score is usually between 300 or 800:below 500 is really bad, 500-600 is average, 600 or up is good credit, 650 or up is really good credit, 700 or up is great credit, and almost nobody has 800 credit.

What are the 3 credit agencies?

The three major credit agencies or "bureaus" are Equifax, Experian, and TransUnion. Each agency will give you a score, and your score is usually determined by averaging the three or by taking the middle score.