Everything You Need To Know about a Credit Score

Everything about a Credit Score
A credit score is a numeric representation of your credit documentation. The lenders use it as a tool to determine your creditworthiness, i.e. it tells lenders how responsible you have been with your credit in the past. Credit score is a 3-digit number ranging from 300 to 850. It contains information about your loans, bill payment history, current debt, and other financial information.
need to know credit score

What is a credit score made of?

A credit score is comprised of five components that have associated weights: 
  • Payment history
  • Amounts owed
  • Length of credit history
  • How many types of credits in use
  • Applications for new credit accounts
The higher your credit score, the less risky you may be to the lender. Having a good credit score can benefit you to take a loan, rent apartment and lower your insurance rate.  

How to access your report?

You can get a free credit report from each of three major credit reporting agencies – Equifax, Experian, and TransUnion – once in 12 months. You can request at AnnualCreditReport.com or call toll-free 1-877-322-8228. You’re entitled to a free credit report within 60 days of being denied, if your application for credit, insurance, or employment is denied, or your report is not accurate.
To buy a copy of your report, contact:
  • Experian: 1-888-397-3742; experian.com
  • Equifax: 1-866-349-5191; equifax.com  
  • TransUnion: 1-800-916-8800; transunion.com

What is a credit reporting agency?

A credit reporting agency (CRA) is a company that collects information about your residence, work, bill payment behavior, whether or not you have been sued and arrested, or filed for bankruptcy. Credit report contains all of this information and a CRA then sells your credit report to creditor, employers, insurers and others. Credit reporting agencies are not operated by the government, but you can file a complaint about your reservations to the federal government.

Fixing Errors in a Credit Report  

It’s a great idea to request a credit report from each of the three credit reporting agencies. You should also review them carefully, as each one may contain inconsistent or inaccurate information. If reports contain an error, you must notify all three nationwide credit reporting companies within 30 days of receiving your report.

What if your request for a free credit report it denied?

Speak to credit reporting agency (CRA) directly to try and resolve the issue. The CRA should explain to you the reason why they denied your request for a free credit report and suggest what to do next. Typically, you will only need to provide missing, or incorrect & inconsistent information on your application for a free credit report.
If you are unable to resolve your dispute with the CRA, contact https://www.usa.gov/federal-agencies/consumer-financial-protection-bureau.
Responsibility is key
Above all, you must use your credit responsibly. A good credit history and credit score can play a vital role to enable you to purchase a home, buy a car, or pay for college fee. Proactively managing your credit report is a smart idea to stay in control of your finances, and ultimately achieve your goals.