A Complete Guide to Your Credit Score

If you don’t know what your credit score is, you should. This is one of the most basic pieces of information potential creditors use when they decide whether or not you should qualify for a loan or credit card, for example. More than that, though, your credit score is also sometimes used as a means to gauge your reliability as a potential employee when you apply for certain jobs, and for other important situations. For this reason, it’s very important not just to know what your credit score is, but also how to use it so that it can work to your best advantage.

Your Credit Score – Defined

It should be noted, first of all, that the most important type of credit score is something known as the FICO score. “FICO” stands for “Fair Isaac Corporation.” The Fair Isaac Corporation simply developed a process whereby your credit score is calculated based upon a number of factors, including such factors as how reliable you are with payments (are they on time?), how much debt you owe, whether or not you’ve defaulted on a loan or credit card, and so on. It should be noted that there ARE other so-called “credit score” calculations out there, but the only one most people pay attention to is the FICO score. All three major credit bureaus (Experian, TransUnion, and Equifax) use FICO scores on their reports. FICO scores can run anywhere from 300 to 850, with the average in the United States being between about 600 to the maximum, 850. You should also note that many lenders will not even consider lending money to people with scores below about 600.

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