Benefit Yourself By Studying Your Credit History

As you do your debt clean-up, you may request for copies of your credit reports and credit scores. The reports can be availed for free of charge, but credit scores cost around $ 15 since the information contained therein will be used as reference used by financing institutions to determine the interest to be charged.

The scores can be taken from a credit report collected by one of the three credit bureaus: Eperian, Equifax and TransUnion. Lenders use credit scores in quickly measuring the paying capacity of a loan applicant. The higher the credit score, the better the paying capacity or less risk of default and the more likely that a potential borrower will get the best deal.

The FICO score – developed by Fair Isaac, is the most common used by the lenders.

Your FICO scores which are derived from your credit reports are used by lenders as a measurement showing how much outstanding debt you owe and how much credit you have available to you. Having too much of both may not be a good indicator, leading to a denial of a new loan application.

Scrutinize your credit reports. Report any inaccuracy or error for the bureaus to investigate and correct them. Some items may lower down your credit rating such as unused open lines of credit or account that you thought had been long ago. Each of the three bureaus may gather different credit history information which is why your credit score may vary. That's why it is recommended to get reports from the three.

If you have been denied of employment, credit or housing loan application within the past 60 days, you may obtain a free credit report from all the three credit bureaus. Credit reports can be obtained free from Annual Credit Report (which is the only authorized source according to the FTC), while you FICO score can be taken from MyFICO.com.

Source by Roland Hop

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