What is a credit score? Learn about different credit score ranges and how it affects your borrowing power
What is a credit score? Credit score is a number that summarizes the historical credit information on a credit report. This number represents the probability that you will become a delinquent on a loan or credit obligation in the future. VantageScore is a credit score developed jointly by Experian, Equifax and TransUnion. This score is used the same formula in all three credit reporting agencies, resulting in a credit history more accurately and consistently. Credit scores use information from three key areas of your credit report, the account information such as credit cards, auto loans, student loans and mortgages, public documents such as tax license and bankruptcies and inquiries requested by lenders to view your credit card. Information such as race, sex, place of residence and marital status are not used in credit scores.
Credit scores can be derived from various sources. Lenders may ask for your credit score and is given with your credit report. There are a lot of credit reporting agencies that provides credit scores to a number of credits for developers. Lenders who want to submit scores on a credit report. Credit scores can also calculate mortgage companies that will take your credit reports from each national credit card company, and then provide aggregate reports and results of the provider. Credit institutions may also apply its own, after receiving the results of their credit report. There are many different credit scores of different regions. Therefore, it is possible that two different results represent the same level of risks of the loan. When you request a credit score from Experian you not only get scores, but also an explanation of what the number is shown of how lenders look at creditworthiness. If you have a good credit score from Experian, you’re probably also have a good score with lenders, even if the numbers are different.
One of the unique features of VantageScore is the scale it uses. Scores range from 501 to 990 in groupings that approximate the familiar academic scale, making it easier for you to understand your score.
- A: 901—990
- B: 801—900
- C: 701—800
- D: 601—700
- F: 501—600 (High Risk)
Keep in mind that there are many different credit scores in the market and the score range will vary by model.Banks, credit card companies, car dealerships, stores and other lenders decide if you get your loan. Most companies that issue or certify loans using credit scores to quickly summarize the credit history of a consumer, saving the need to manually review the applicant’s credit report and provide better decisions faster. Although many other factors are used to determine whether or not you get the credit you have requested – and the income of an applicant in relation to the size of the loan – a credit score is an important indicator of its solvency basis. Credit bureaus do not make lending decisions.