What is a Credit Score?
A credit score is a number which is based on a statistical analysis of a person’s credit file, to represent the creditworthiness of that person. A credit score is primarily based on credit report information, typically from one of the three major credit bureaus: Experian, TransUnion, and Equifax.
There are several different credit scoring models including the FICO scores, VantageScores, PlusScores, TransRisk Scores, etc…
FICO Scores are the gold standard for credit scoring models and are used in over 90% of lending decisions.
The 3 most common FICO algorithms are:
FairIsaac 2.0 (used by Experian)
Beacon 5.0 (used by Equifax)
FICO RiskScoreClassic 04 (used by TransUnion).
Don’t let the different credit scores confuse you, they all follow the same basic algorithm in determining your creditworthiness.
By improving the factors which are used to calculate the credit scores, CreditFirm.net helps increase our clients credit scores.
Why do you need a good credit score?
Lenders, such as banks and credit card companies, use credit scores to evaluate the potential risk posed by lending money to consumers and to mitigate losses due to bad debt.
Lenders use credit scores to determine who qualifies for a loan, at what interest rate, and what credit limits they will issue.
Credit scoring is not limited to banks. Other organizations, such as mobile phone companies, insurance companies, landlords, and government departments employ the same techniques.
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Credit Report Repair
If you have any questions about your credit reports or would like to find out how CreditFirm.net can help you improve your credit history and increase your credit scores please call us at 800-750-1416.