Credit Report Score: Your Key to the Sesame of Loans |
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Your credit report score is a three digit
grade that determines how eligible you are to apply for a loan. Nowadays,
almost all the banks, credit unions, and financial institutes ask for your
credit report score before they sanction you a loan. If you are planning to buy a house or a car by taking a loan, don't forget to check your credit score before you start your journey. For consumers, it's necessary and wise to know about their credit score before they approach a lender. Your credit report score is clearly mentioned in your credit report, which can be procured from any of the three major credit-reporting agencies: Experian, Equifax, and TransUnion. You can apply for a copy of your credit report by contacting the agency in person or online. Nowadays, the online application process for getting a credit report is gaining popularity because it saves a lot of time and individual effort. The most widely used credit report score is the FICO, an acronym for the Fair Isaac Company, which developed it a number of years ago. According to the company, the FICO score ranges from 300 to 850. The higher your score, the less you need to pay on your interest rate. Your FICO score is primarily based on your repayment habits. If you pay all of your bills on time, you are sure to get a very good score compared to others who fail to do so. Moreover, other factors like the amount of your outstanding debts, the number of mixed credits, the number of inquiries made etc. are also crucial in determining your credit score. Today, millions of Americans are suffering from credit report score errors. According to one recent survey, over 75% of credit reports carry some sort of errors. Although, most mistakes on your credit report are small and trivial, such as typos and incorrect dates, yet your report is not exactly free from significant mistakes too. In fact, 25% of the personal credit reports contain severe mistakes for which the lenders might reject credit applications. Errors in your credit report may cause a variance of 50 points or more in your credit score and consequently sabotage your chances of getting a good deal. So, if you find any kind of error on your credit report, contact any of the three national credit-reporting agencies. The credit-reporting agency would initiate an investigation by contacting your creditors. If the credit-reporting agency can't verify a disputed item, it must delete it. When the investigation is completed, the agency would send you a free copy of your credit report including your credit report score. If the investigation catches an error, you have the right to ask whether a corrected version of your credit report has been sent to everyone who received the report during the past six months. Generally, the three major credit-reporting agencies do not share data among them. Therefore, your credit report score may also vary from agency to agency. Hence, it's a good idea to go for three separate credit reports from the three agencies. You can get your credit report piece by piece or all at once from these agencies. Moreover, if you have the time to shop around, you would find several credit consumer agencies that sell you 3-in-1 credit report packages containing data from the big three in one tidy package. It only depends on how much your time is worth to you. Whatever agency report you take, you need to burn your candle at both ends, if you find your credit report score too low. No doubt, the credit-reporting agencies are there to help you, but no one can bring a permanent solution to your credit score problems until and unless you take a firm step from your side. You need to pay all your payments on time. And once you get into the habit of regular payments, you would definitely observe a rise in your credit score. |
