What Does Your Credit Score Tell You?
As soon as you receive your personal copy of your credit report score, the next important step is to scrutinize its contents. In this article, let’s discuss the basic facts about the FICO method of credit scoring to help you interpret the information in your report. The three major credit report firms (Experian, Equifax, TransUnion) as well as other financial companies make use of the FICO model in calculating consumer credit scores. Nevertheless, it’s important to understand that each bureau does its own reporting, separate from the other 2 major bureaus. For this reason, you may find some variations with the reports issued by different bureaus. This is also why consumers are advised to order one copy of their report from each credit bureau to make sure that all versions are accurate. There are five aspects in the FICO credit scoring model that can affect your final rating. These are length of credit history, the types of your accounts, payment history, credit-to-debt ratio, and public records. Based on the FICO model, each factor comprises a percentage that will add up to the final credit rating. Read more about What Does Your Credit Score Tells You?