A:

Your credit report is almost like a report card for your debt history. It shows your personal information, including name and address. It also lists all your creditors with current balances, those with paid-off balances from the last 7-10 years, and those accounts that are in arrears. It also lists all the inquiries that have come in for new credit; with those you've applied for coded differently than unsolicited offers. Finally, it records how well you've kept up with your payment agreements with each of these creditors and what your last updated balances were.

The credit score that often accompanies a credit report is a numerical representation of your relationship to credit. To develop your credit score, FICO analyzes your debts against your limits, your history of on-time and late payments, the number of accounts you have, the various types of accounts you have (such as revolving, installment and so on), the length of your overall credit history and the amount of new credit you've been applying or. It takes all of that data and weights it according to a proprietary formula, creating a score that can range from 300-850. The higher your credit score is, the better. A score of 775-850 is like getting an A on your use of credit - and lenders will respond to that by offering you better terms on new loans.

RELATED FAQS
  1. Will having several credit cards hurt my credit score?

    The manner in which you use your credit cards may affect your credit score more than the number of credit cards you own will. Read Answer >>
  2. What are the best ways to rebuild my credit score quickly?

    Repair your credit score more quickly by talking to your lender, increasing the credit limit on your existing credit cards ... Read Answer >>
  3. What are the biggest factors that can affect my credit score?

    A credit score is a numeric expression that helps lenders estimate the risk of extending credit or loaning money to people. ... Read Answer >>
  4. What is the difference between bad credit and no credit?

    The answer to this question will depend on what information (if any) is found on your credit report, such as any bankruptcy ... Read Answer >>
  5. How do balance transfers affect my credit score?

    Learn the ways a balance transfer can negatively and positively affect your credit so you can pay off debt while maintaining ... Read Answer >>
  6. Will credit card inactivity affect my credit score?

    Whether your credit score will be affected by inactivity depends on how you define "inactivity". Your credit report does ... Read Answer >>
Related Articles
  1. Retirement

    6 Methods to Maintain a Healthy Credit Score During Retirement

    Learn how to improve your credit score during retirement. Your credit score still matters in retirement, and these tips can give it a boost.
  2. Credit & Loans

    Millennials: Prevent a Bad Credit Score

    Here are five ways to help prevent getting a bad credit score that could affect future loan, credit card or mortgage approvals.
  3. Credit & Loans

    5 Common Misconceptions About Your Credit Report

    Your credit report is one of the most important factors in determining your ability to get loans and new credit and has a major influence on your rates.
  4. Credit & Loans

    The 5 Biggest Factors That Affect Your Credit

    Credit companies rely on these factors to determine whether to lend to you and at what rate.
  5. Credit & Loans

    Your Credit Score: More Important Than You Know

    Credit scores affect key aspects of your personal and professional life. Knowing your score and managing your credit input can make a big difference.
  6. Credit & Loans

    9 Ways To Improve Your Credit Score Today

    When it comes to finances, there are a number of goals that you might have established, such as saving money, paying down debt or new investments.
  7. Credit & Loans

    How Bad Is My Credit Score?

    You've seen the number, but what does it mean? Here's how to assess your credit score and get to a better place if needed.
  8. Credit & Loans

    Credit Score vs. Credit Report: Which Is Better?

    They sound alike, but can serve very different ends.
  9. Credit & Loans

    Fixing Your Credit Score: A Do It Yourself Guide

    Following these five steps can go a long way toward repairing a low score.
  10. Credit & Loans

    7 Credit Myths You Thought Could Hurt Your Score

    The Internet is brimming with tales of how your complete lack of knowledge surrounding credit scores is costing you big every day.
RELATED TERMS
  1. Credit Mix

    The types of accounts that make up a consumer’s credit report. ...
  2. Credit Utilization Ratio

    An input used in determining a person's credit score. It is the ...
  3. Negative Information

    Data in a consumer’s credit report that lowers his or her credit ...
  4. Balance Chasing

    The gradual lowering of a consumer’s credit limit by a credit ...
  5. Good Credit

    A qualification of an individual's credit history that indicates ...
  6. Credit Scoring

    A statistical analysis performed by lenders and financial institutions ...
Trading Center