Who invented credit scores




















The most important factors to consider when managing your credit score include:. Your history o f repayment, and whether you have derogatory marks for paying late or defaulting. How much money you owe compared to your credit limits, called credit utilization ratio.

How often you have applied for credit recently, called "hard inquiries. The types of credit you have the kind with fixed payments, like an auto loan, or variable payments, like a credit card. Your scores will fluctuate depending on your account activity. When you apply for a credit card or a loan, the lender will check your credit score to determine your eligibility.

It's smart to monitor your score yourself so you'll have an idea of how a lender might size you up. This can be especially useful if you are looking to build your credit. Just use the same version of the same score every time. It's like weighing yourself; using the same scale each time screens out slight variations due to equipment. Three major credit-reporting companies — Equifax, Experian and TransUnion — compile the reports.

Credit reports often run to many pages as they detail your accounts and how diligently you've paid off outstanding balances. Negative information such as repossessions or bankruptcies will appear on your credit report, too. You alone have the power to improve your score by consistently paying all your bills on time and managing your credit wisely.

In the run-up to the great recession, many lenders overlooked important underwriting criteria, such as collateral and proof of employment, and as a result made riskier loans. Securing credit was a lengthy, onerous and highly subjective process. Consumers today can often get lending decisions in seconds, and those decisions are made without any bias or prejudice.

If you decide you want to build a credit history at some point in the future, you will need to begin applying for and using credit. They each just have a few tweaks. It really is that simple. The scores sold at myFICO. Citigroup, the fourth-largest credit-card lender by purchase volume in the U.

Continue Reading. By now, you may tune out TV commercials touting offers for free credit scores -- which often have expensive strings attached. It is fairly simple to get a free copy of your annual credit report. Now several credit-card issuers are providing certain types of free FICO credit Having trouble paying your bills on time?

Millions of Americans are woefully behind on credit card payments, utility or medical bills, even parking tickets and may not understand the devastating effect on late payments or not paying at all can have on their credit. Worried about your credit score? As a contributor to Credit One Central, Robert has leveraged his expertise in taxes, budgeting, and building credit to create engaging content.

This material is for informational purposes only and is not intended to replace the advice of a qualified tax advisor, attorney or financial advisor. Readers should consult with their own tax advisor, attorney or financial advisor with regard to their personal situations. As credit scores have become more available and accessible, consumer interest in them has grown—but so has consumer confusion. Throw in credit reporting agencies, and it gets even more confusing. Your credit history is a key factor used by creditors to make lending decisions.

Your credit history may also be used to make insurance, employment, and even rental application decisions. Pushdown Message Header. Pushdown Message: Not defined. Enable JavaScript and Cookies. JavaScript and cookies need to be enabled in your browser to use this website.

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