Credit Rating Scores
At this modern time coupled with all the innovative technologies, people have been wanting things to be quick. Even when eating, which is why fast- food chains have been created. Even when researching, which is why encyclopedias are rampant over the internet. Even when shopping, which is why automated- teller machines are scattered all over. Even when luxury- spending, which is why credit rating scores are very much beneficial nowadays.
Credit rating scores are distinguished by the reporting agencies that issue the points based on disparate assessment methods which are all grounded on different factors. There are times that people only take into consideration the information found on their accounts which is actually based on several matters such as payment history, current debts, time length, type mix and application frequency. All of those mentioned are essential in calculating a person’s points.
Equifax, TransUnion and Experian are the three major reporting agencies in the United States. They all have variegated criterions used which are weighted differently. Making it the reason why the points they give are not the same as the others. However, they are all rooted from lone credit rating scores.
FICO, acronym for Fair Isaac Corporation which is the brain- child behind the software that has been applied since the 1960’s, is the reference of Equifax, TransUnion and Experian. Credit rating scores range between 350, an extremely high risk condition, and 850, a tremendous low hazard status.
In a gathered statistics in 2003, almost a percentage of 30 of Americans reached a soaring 750- 799. Twenty percent for 700- 749, about 17% for 650- 699 while 12% each for 600- 649 and 800 beyond. Only 7% for 550- 599 and a percentage of two for 500- 549. The figures indicated that a lot of them are cautious of their credit rating scores while only a few are not. It is a positive situation suggesting that they have been really into improving their accounts to acquire more perks that come along with it.
When you start to borrow money from any institution that allows loans, the reporting agencies determine your points based on previous credit performance, indebtedness stage, used time, available type and pursuit appraisal. All of those are not exempted in the calculation which is not given equal weighting. The breakdown is divided into 35% of credit performance, 30% of indebtedness stage, 15% of used time, 15% of available type and 5% of pursuit appraisal.
It showed that credit performance takes on a big chunk in considering your application. All institutions that allow loans give a much attention to the history of paying your debt. The factor that can add a booster is having a past that suggests you eagerly meeting deadlines by giving payments right on time.