You have no doubt heard quite a bit about “good” credit scores and “bad” scores, but perhaps you have wondered what is a credit score and how it can affect your life? First, a credit score is a number that has three digits automatically generated with the use of algorithms that is given to everyone with a social security number that typically falls between 300 and 850; the higher the number the better your overall credit worthiness in the eyes of credit-granters. Typically, the live score software used to create the score is the Fair Isaac and Company.
The score is given to you automatically based on how you pay your bills, particularly car loans, house payments, and credit cards. When you pay your creditors on time, they report this to the three credit reporting bureaus, Experian, TransUnion, and Equifax, and when you pay them late, this is also reported. When you receive your credit score, it is typically called your FICO score, and then used when you are applying for new credit, such as a new home.
When asking the question, what is a credit score, most people want to know how it will affect them when they are applying for new credit. If you have always paid your bills on time and have no late pays, you will have a higher score than someone who has continually paid their bills late or are delinquent on several accounts. Therefore, if you have a poor score, you can expect to pay more in interest than someone with strong credit scores.
One of the biggest challenges facing people who have poor scores is securing new loans for large purchases, such as automobile or a new mortgage. Trying to clean up your credit reports on your own is not only challenging, but it can cause a lot of confusion when it comes to what to address first. This is the precise reason getting help from someone who is skilled in removing negative information from your credit reports is crucial. When you enlist the help of someone who is skilled in correcting and removing negative information in your credit report, you will steadily see your credit score improve.