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.

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