Your Credit Score

So What’s This “Credit Score” All About?

Your credit score is essentially a number that’s based on your overall credit worthiness.  This credit worthiness is a representation of how likely you are to pay your bills, and pay your bills on time.  Generally, an individuals credit score is based on information stored within “reports”.  One thing that does not have impact on your credit score is your income.

 There are three main bureaus that are responsible for this.  They are:

-Experian

-Transunion

-Equifax

The most common way to calculate a credit score was developed by FICO. FICO was previously known as Fair Isaac Corporation. Although there are different methods of calculating credit scores, the FICO score is the most common, and most widely known.

Most lenders, such as mortgage lenders, who use a high-risk-based system to determine the possibility that the borrower may defaul use this score when making that determination. Each of the different bureaus have their own credit scores, which are as follows:

-Equifax: ScorePower

-Experian: PLUS score

-TransUnion: credit score

Each also sells the VantageScore credit score. In addition many large lenders, including the major credit card issuers, have developed their own proprietary scoring models.