What Is Meant by a Credit Report Score

What Do Credit Score Mean?

A credit score is a highly condensed and concentrated format confined to a three digit numeric value in which is quantified a very long story concerning an individual’s traits and qualities depicted in his financial disciplines and actions in the past involving credit availed and their settlements and repayments.

You are considered above board and would have no problem in getting loans approved at low rates of interest if you have a credit score of 700 or more. For any score below this, you could face the prospect of your loan being completely declined or approved a lesser amount than applied for at a much higher rate of interest and with a shorter period of repayment.    

Check Credit History

A prospective lender will go through all the details in your credit history record to ascertain whether you have made any late payments, gone through a property foreclosure or even filed for bankruptcy in the past. Another aspect they are very interested in is how much your total debt is like inclusive of loans and purchases on credit cards.

How long your credit history is also an important factor in establishing how creditworthy you had been. However, if your credit history contains late and missed payments, lenders may not take them very kindly. Recent credit opened in the form of a new credit card account could be viewed favorably by a prospective lender, whereas actual opening or even evidence of attempted opening of several accounts of this nature will certainly make a lender suspicious of your financial etiquette.

A credit report cannot contain any information of a personal nature such as your gender, nationality, color of skin, religion and marital status etc. It will also ignore whether you are in receipt of any assistance or enjoying any consumer rights under such acts as the “Fair Credit Reporting Act” or the “Equal Credit Opportunity Act”.

It will be in your interest to obtain your credit report annually from one of the three credit bureaus, also called credit agencies, namely Equifax, Experian or TransUnion.

Steps To Improving Credit Score

Having obtained your credit report, take all necessary steps to improve your credit score if it is not good. This implies among some other measures, settling your bills on due dates and requesting your biggest creditor to put your current transactions off record for a short period to enable you to repair and improve your credit score. There are some credit counselors who operate on a principle of non-profit making that you may consult for further assistance in sorting out your possibly messed up finances. One of the things that you should absolutely refrain from doing is filing for bankruptcy however desperate your position may be.  

If you spot any erroneous entries in your credit record score, take it up immediately with the credit-reporting agency from where you obtained the relevant copy. Send all the documentary evidence available in support of your claim taking care to send only copies, keeping the originals to fall back on in case these are lost in transit or elsewhere. The agency will then hold an inquiry into your complaint, and if the relevant creditor is unable to refute your claim, your contention would be accepted and your credit record and the credit score will be amended accordingly. You would also receive an amended credit record score free of charge from the said agency.  

Now that you have a better idea of what a credit record score is, obtain your credit record score from one of the earlier stated agencies and see where you stand. Take every action already discussed above to improve your credit score to a level of at least 700 points. By now it may also be quite evident to you that a good credit score and nothing else is the passport to a thumping low interest loan, be it for your college tuition, purchase of a new vehicle or a new house.