March 23, 2018

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What is a Credit Score and Why is it Important?

Age may just be a number, but a credit score can make or break your financial future.

What exactly is a credit score? The easy answer is that itís a number assigned to an individual consumer based on their credit history. Failure to pay back debt in a timely fashion or, worse yet, defaulting on a loan or payment entirely is likely to result in a very low credit score. A stellar credit report, which includes a consistent history of on-time bill payment and loan repayment, will result in a high credit score.

The more complex answer to the question of what is a credit score is that it is a three-digit number assigned through a mathematical algorithm using information pulled from a consumerís credit report. The numbers range from a low of 300 to a high of 850. The number is supposed to predict the risk associated with doing business with that particular individual. A credit score higher than 700 is a good indicator that the consumer has an excellent credit history and is in the low-risk category for defaulting on a loan or payment.

Creditors with scores in the 500 and 600 ranges are considered medium risk and may have a history of failure to pay or consistently paying late. Scores below 500 indicate a high-risk consumer. These are the folks who may find they are having trouble obtaining loans, utility services or even employment due to their credit scores. They have consistent histories of failure to pay or of paying late, making them undesirable with which to do business.

Every credit score consists of five criteria: payment history, amounts owed, length of credit history, new credit and types of credit used. Payment history counts for 35 percent of the total score, and includes things like account payment information. The balance owed to creditors consists of 30 percent of your score, and is a reflection of how much is owed on every open account a consumer holds. The length of the credit history is 15 percent of the total score. This covers how long ago accounts were opened and how often they register activity by the consumer. The types of accounts the consumer holds counts for 10 percent of the total score and new credit consists of the remaining 10 percent.

A consumerís age, sex, race, address, marital status, income level or employment status have no effect on the credit score. However, there is one credit-score model that dominates the industry Ė FICO. Over 90 percent of all U.S. financial institutions use FICO scores when determining credit worthiness.

Consumers who wish to review their credit score can do so by requesting it from any of the three credit reporting agencies (Experian, Equifax and TransUnion) or from While federal law requires that all consumers receive one free credit report annually, that provision does not cover the receipt of a credit score. Credit scores cost $20 and up, depending on the agency used to obtain them.

Federal Trade Commission warns of credit repair scams

HOUSTON - Scammers aren't just out for your information- they could turn you into a crook. The federal trade commission says criminals are taking advantage of people looking to repair their credit. Watch the video for more insight!

Published:  Wed, 21 Mar 2018 19:20:00 GMT

Quality Credit Repair Offers Credit Card Debt Relief for Struggling Households

Philadelphia, PA -- (SBWIRE) -- 02/22/2018 -- Credit card debt in America has reached epidemic levels, as more and more households take on debt to cover living expenses as wages fail to keep pace with rising rates of inflation. According to a CNBC report ...

Published:  Wed, 21 Feb 2018 23:00:00 GMT

Experts stress importance of knowing signs of credit repair scheme

SPRINGFIELD, Mass. (WWLP)- If you don't have good credit you may have been approached by a credit repair company at some point.. but if you don't do your research you could become a victim. "People always look for a quick fix, an easy fix and that ...

Published:  Tue, 06 Mar 2018 05:31:00 GMT

Montgomery credit repair company shut down, accused of deception

A Montgomery credit repair company has been permanently closed for deceptive and illegal practices, according to Alabama Attorney General's Office. Attorney General's Steve Marshall's office reached a settlement with Scott's Credit Repair and its ...

Published:  Mon, 30 Oct 2017 09:29:57 GMT

$2-million settlement ends accusations that L.A. credit-repair firms misled consumers

Credit-repair services promise to help consumers fix their credit scores, but there's only so much they can do. They can help clear up inaccurate or outdated information on a consumer's credit report, but they can't erase legitimate dings. But the Consumer ...

Published:  Tue, 27 Jun 2017 16:30:00 GMT

CFPB cracks down on 'credit-repair' companies

WASHINGTON -- You've almost certainly seen or heard pitches for "credit repair" services promising to clean up your credit problems, reduce your debt, or even raise your credit scores by 100 points or more. Come-ons like these can be especially seductive ...

Published:  Thu, 06 Jul 2017 23:00:00 GMT

Keep it good: Understand credit repair

Anywhere you can see with your eyes, there's an advertisement relating to credit repair. It seems that credit repair is a term that you're likely to come across at least one point in your life. But what does it mean, actually Well, credit repair ...

Published:  Tue, 24 Oct 2017 02:10:00 GMT

How to repair your credit

KNOXVILLE, Tenn. (WATE) - Maintaining a clean credit history is important. Lots of things depend on having good credit. With bad credit, it's tough to get a loan and when you do qualify, the interest rate is high. The tool to hammer your credit history ...

Published:  Tue, 17 Oct 2017 10:18:00 GMT

Watch Out for These Credit Repair Red Flags

While the economy has been improving overall many Americans still struggle with their credit history. Currently, over 68 million have a bad or poor credit score (lower than 601) and are looking for fast, easy ways to fix or even erase damage to their ...

Published:  Sun, 07 May 2017 14:35:11 GMT

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