Your credit score is the key to obtaining financial products and services. However, understanding what your credit score means, and how you can improve your score confuses most people. Hopefully, the information and links on this page will help give you some clarity.
What is the difference between a credit report and a credit score?
According to the Consumer Financial Protection Bureau, your credit report and credit scores are two different things. A credit report is a statement that has information about your credit activity and current credit situation such as loan paying history and the status of your credit accounts. Your credit scores are calculated based on the information in your credit report.
For more information, click here to visit the Consumer Financial Protection Bureau website.
The Federal Trade Commission (FTC) states that credit scoring is a system creditors use to help determine whether to give you credit. It also may be used to help decide the terms you are offered or the rate you will pay for the loan.
Information about you and your credit experiences, like your bill-paying history, the number and type of accounts you have, whether you pay your bills by the date they’re due, collection actions, outstanding debt, and the age of your accounts, is collected from your credit report. Using a statistical program, creditors compare this information to the loan repayment history of consumers with similar profiles. For example, a credit scoring system awards points for each factor that helps predict who is most likely to repay a debt. A total number of points — a credit score — helps predict how creditworthy you are: how likely it is that you will repay a loan and make the payments when they’re due.
The Federal Trade Commission (FTC) suggests the following:
Click here to visit the Federal Trade Commission website
A FICO score is a type of credit score created by the Fair Isaac Corporation. FICO scores are calculated by the following breakdown:
Click here to go to myFICO Credit Education.
The Fair Credit Reporting Act (FCRA) requires each of the nationwide credit reporting companies—Equifax, Experian, and TransUnion—to provide you with a free copy of your credit report, at your request, once every 12 months. To get your credit report, go to www.annualcreditreport.com, or call 1-877-322-8228. This is the only website authorized by the government to fill orders for free annual credit reports to which you are entitled under law. Once you receive your credit report, thoroughly check the information to ensure that it is accurate and current.
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Main Office: (931) 289-5500
Traditions First Bank - Institution NMLS #791806
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