What is a credit score?
A credit score is a statistical measurement used to predict how likely you are to repay a loan. The score is drawn from information on your credit report and data from millions of consumers. It provides lenders with a fast, objective way to evaluate your credit history.
What factors influence my credit score?
Any action you take related to your credit practices influences your credit score, from timely, regular monthly payments (which will have a positive influence) to minimum payments on maximum credit card balances (which will have a negative influence).
What is a good credit score?
Credit scores typically range from 300 to 850. A credit score that falls between 680 and 850 is considered more favorable and a lesser credit risk.
Can I change my credit score?
Yes – in fact, you are the only person who can change it. You can improve your score by paying off loans, reducing credit card balances and making monthly payments on time. After a period of time, generally a year or two, such practices will usually be reflected in your credit score.
Does a lender take anything else into consideration when I apply for a loan?
Yes. Although lenders rely heavily on credit scores, other factors are taken into consideration, including your job history, income, savings and checking accounts, the types of loans you currently have and the type of mortgage loan you want.
What can I do if I don’t have credit?
If you don’t have credit as reported by the credit-reporting agencies, most lenders will accept alternative sources of credit. This could include “credit references” in the form of bills you have paid on a regular basis for rent, utilities, cable TV or insurance.