Many creditors, landlords, insurance companies, employers also use your credit score in addition to your credit history to make decisions about you.  Your credit score, also called your FICO score, is determined by the information on your credit report.  FICO was developed by the Fair Issac Corporation

Your credit score may change from month-to-month and is based on a variety of reasons such as:

• How you pay your bills
• Loans you have
• Credit cards you may have opened
• Number of companies that checked your credit report

Your credit score is determined by 5 main factors:

• 1. Payment history to determine how you pay your monthly bills.
• 2. Current debt with loans and credit cards. 3 – Length of time you have had credit or how long you have had credit cards and loans.
• 3. The type of credit you have.
• 4. Credit inquiries on your credit report.

This information is then statistically analyzed to determine a numerical number between 300 and 850 which is ranked as follows:

• Excellent: 750 to 850
• Good: 720 to 749
• Fair: 660 to 719
• Uncertain: 620 to 659
• Poor: 300 to 619

The number represents the creditworthiness of a person, which is the likelihood that the person will pay their bills. Mortgage and auto loans usually use your score to determine interest rate charged. The lower a consumer’s credit score, the higher the interest charged due to the consumer considered a higher risk.

The credit score is typically from one of the three major credit bureaus which include Experian, TransUnion, and Equifax. You are entitled to 1 free credit report within a 12-month period from each of the three agencies which are available at Annualcreditreport.com. The report doesn’t list your credit scores, which is available for a fee.

In some states, such as California and Colorado, you can get a free credit report within 30 days of being denied credit or receiving sub-normal credit terms from a lender, due to their credit rating.

You can increase our FICO score by improving your finances.  You FICO score will increase if you:

• Correct errors on your credit history
• Pay off you account balances
• Pay you debt on time
• Increase your savings
• Minimize the amount of credit you apply for