How Does a Creditor Determine Whether to Grant You Credit?

Credit 101

How makes a creditor determine whether to allow you credit? For many years, creditors have got been using credit scores and credit scoring systems to determine if you’d be a good hazard for a loan or credit card. More recently, credit scores have got been used to assist determine what rates you pay for insurance. What is a credit score and why is it so important?

What is a credit score?

Credit scores and credit scoring systems are used to assist creditors measure the hazards associated with granting loans and extending credit. Everyone have a credit score. Information about you and how you have got handled your credit is captured onto a credit report. How you have got got paid your bills, the number and type of account you have, late payments, aggregation actions, outstanding debt, and the age of your accounts, is collected from your credit application and your credit report. Using a system, creditors are able to compare all of this information against the credit public presentation of other consumers with similar profiles. A credit scoring system delegates a point value for each factor and assists foretell who is most likely to refund a debt. The sum number of points is combined to constitute your credit score. Your credit score foretells your creditworthiness or the chance that you will refund a loan / credit in a timely fashion. The higher the credit score, the lower the hazard associated with extending loans and credit. The lower the credit score, the higher the hazard associates with extending loans and credit.

Because credit reports and credit scores are so of import in today financial world, it is imperative that you supervise these closely. I urge that you contact the three major credit bureaus to obtain a transcript of your credit report at a minimum of every 90 days. To obtain a transcript of your credit report contact:

Equifax: (800) 685-1111

Experian (formerly TRW): (888) EXPERIAN (397-3742)

Trans Union: (800) 916-8800

Just as there are three major credit bureaus, there are three separate credit scores provided by each of them. All of these scores are developed utilizing a method Carnival Issac came up with to guarantee that an accurate image of our credit hazard is generated. Each score may change slightly, as the information incorporate on each credit report from each of the three major credit bureaus is different.

When lenders and financial establishments measure your credit report and credit scores, they utilize information provided by these three major credit bureaus. It is imperative that you supervise these credit reports, as your financial hereafter is incorporate on those pages. There are rights afford to each of us arsenic consumers by law, which allow us to guarantee that the information contained on these reports are accurate With the Federal Soldier Agency of Probe naming “IDENTITY THEFT” as the number 1 crime, it is imperative to keep your credit profile in today’s world. Don't allow a theif steal you and your households financial futures!

For more than information regarding your credit scores, credit reports or debt options currently available to you, delight contact Gateway Credit Connection or visit us online at www.creditmonkey.com.