A credit card is a card issued by a bank to its customers on the promise of paying back. Credit card and Debit card both are bank-issued cards. The fact is both works differently. Read our post on Credit card vs Debit Card. The debit card only works if the holder of the debit card has a balance in his bank account. A credit card can be used by its holder to pay merchant, buy goods, and services without maintaining any balance on the agreement of paying back to the bank in a set time frame.
Credit Score
Credit score mostly used by a lender or bank to determine the eligibility of a person who requested for loan. The higher your credit score, the higher chances are there of getting a loan at the low-interest rate.
A high credit score is always a good sign, as it can benefit you in many ways. A high credit score makes it easier to get a loan from a lender, lower your insurance rate, lower your interest rate and rent an apartment.
Your credit report information used to calculate the credit score. A credit score is based on your payment history, your outstanding balance, types of credit accounts, length of credit history, and application for new credit accounts.
Credit Report
A credit report is a report where a consumer can find his full credit activities. A credit report contains current debt, bill payment history, and other financial information. Most lending companies use your credit report to calculate the credit score a number usually between 300 to 850. The highest score is good as it gives a lower interest rate to the consumer.
How To Get Credit Report
American can obtain one free credit report from any of the three credit bureaus. This report does not include a credit score. Get the free credit report at the official website AnnualCreditReport.com
What Is Credit Report
A credit report is a record of financial history from bill payment, current debt to the present loan. The credit report also contains information about the applicant location, work and other legal information such as if the applicant got sued, arrested or filled for bankruptcy.
A credit report is crucial for lenders and companies to decide whether to give you a loan and determine at what interest rate. It advised to regularly check credit report and make sure every information are correct.
Why Credit Score Is Important
As per the Wikipedia…… A credit score is a numerical expression based on a level analysis of a person’s credit files, to represent the creditworthiness of an individual. A credit score primarily based on a credit report, information typically sourced from credit bureaus.
Bank or credit card companies use this credit score to evaluate the potential risk a person has before lending money and to avoid bed debit.
Bank or lending company use this credit card score to differentiate who are eligible for the loan, at what interest rates. Banks also use this score to identify the consumer who most brings revenue to them.
A credit score is a number based on a statistical analysis of a person’s credit file. Credit score determines the creditworthiness of a person.
There are different type of methods which calculate the credit score. In the United States, the most widely used credit score is FICO scores.
FICO Scores
Fico scores are the most used credit scores in the USA developed by FICO previously known as Fair Isaac Corporation. Firstly introduced in 1989 by Fair Isaac and company. This model is nowadays mostly used by every lender and bank. It’s based on consumer (credit card holder) credit files on three national credit bureaus. Experian, Equifax and TransUnion.
FICO scores can vary from each of these three credit card bureaus because of the credit card holder credit files contain different information at each bureau.
A good FICO score is a must to secure credit because 90% most American lending companies and bank use this score determine the eligibility.
What Is Highest Credit Score
Everyone who is looking to secure loan asks this question. Well, most credit scoring system has a number scale between 300 to 850 some go up to 900 to 950. Getting your credit score above 850 is good. It’s not necessary.
What is Considered A Good Credit Score
It’s vary depending on credit scoring models but 670 to 739 considered as good credit score. 580 to 669 considered as fair and 740 to 799 very good. Credit score 800 or above are perfect credit score. Above 800+ credit score is the highest possible credit score but it’s not relevant as it won’t save you more money. Your focus always is to maintain an 800+ credit score.
I hope you got every information you wanted to know about credit score. From what is a credit score to what is best credit score.