Your credit score plays a very important part in your finances. Today, more than ever before, your three digit credit score can determine how much you pay in financing charges for virtually everything, from a car, to a home or refinance, or credit cards. Your credit score can even affect your insurance rates and whether you are hired for a job. Each of the three credit bureaus, Experian, Equifax, and TransUnion, produces their own version of your credit score. They will vary somewhat as each bureau uses a slightly different formula when calculating your credit score.
What's a Good Credit Score?
Credit scores from all three credit bureaus generally range between 450 and 850. The higher your credit score, the better chance you have of saving money. Typically, a credit score in the 700+ range will help you qualify for lower, preferred interest rates. Credit scores of 650 and below will make it harder for you to qualify for the lowest interest rates available. But don't get discouraged, your credit score can always be improved, and it can happen much faster than you think with positive credit habits.
Today, your credit score is used by more and more companies who rely on your credit score to successfully manage risk. Credit scores are a two-edged sword for consumers. A good credit score can save you money, A higher credit score can put you at a major financial disadvantage over the course of your life. It's important for you to maintain good credit habits: Pay your bills on time, don't carry too much debt, pay down the debts you have, and maintain a good, healthy mix of credit accounts: real estate, installment credit, credit cards, and retail/department store cards. Be smart. Use credit wisely.
How is the information in my credit report used to determine my credit score?