Credit reports and their evaluation
Credit reports are made through computation and analyzing of various data. These include the payment history of borrowers, credit card bills, employment and income status, types of loans taken, loans cleared and the duration for the same, number of times that debts have been pulled and various other factors. These are done through various credit bureaus. These credit reports and credit scores are evaluated by various lenders and financial institutions. They help lenders to understand the potential capacity of borrowers to repay loans and the risks involved in the same for lenders.
Availing a free credit score report
There are three main credit bureaus in America which provide free credit reports annually to all citizens. Those who don’t receive the same are entitled to request for the same under the FACT act. These credit reports can also be requested every 4 months from different credit bureaus. The credit reports can be free of cost but there are bureaus which charge for the same. These reports and scores are provided to debtors and borrowers online or through mail.
FICO is the abbreviation of Fair Isaac Corporation. The web site of this company providers all borrowers with their FICO scores. Though different bureaus use different methods for computation of credit scores, many of them also use FICO, which is the most widely used credit score in the U.S. These scores entitle debtors for three kinds of credits which are consumer credit, mortgages and automobile loans. The general difference between each of these scores can be about 50 points. FICO just sells these credit scores but the borrowers have options to select the agency from which this data is obtained.
The first step to improve your credit score
Without knowledge and information about your credit score there is no way that the same can be improved. Hence it is vital to know about your credit score and the status you are in. Those who don’t have any credit history are also at par with borrowers with bad credit score. Without any credit history, credit scores cannot be provided. And having no history implies that most lenders will give you a passé. If you have a good credit score then you should try and maintain the same. But if you don’t then you should device methods so that the same can be improved. Hence it is vital to get your free credit report and keep a track of it.