Your Credit Report Score And What It Means To You

Whenever you apply for a car loan, credit card, department store card, the lender pulls a copy of your credit report. The Credit Report Score is the piece of information they are looking for that will give them indication of your credit worthiness.

What is a Credit Report Score?

A credit score is a complex mathematical equation that uses all types of information in a consumer's credit file. Lenders use the credit score to estimate the risk of the consumer. A credit score ranges from 0 to 800 or more. Most consumers have a Credit Report Score between 750 to 799, while a smaller percentage have credit scores exceeding 800. The higher a consumer's score the more likely they have the income to pay back the loan, while a low credit score is an indication that the consumer can't pay back the loan. A consumer with high credit score can also lock in a lower interest rate on loan than a consumer with a low score, because lending institutions see consumers with high scores as a lower risk.

• •  A Credit Report Score below 500 is low. Consumers who fall into this range have several negative marks on the their credit reports
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  •  A credit score between 500 – 579 is an indication the consumer has collection, charge off, late mortgage payments, a foreclosure or bankruptcy on their report.
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  •  A credit score between 580-619 is an indication that the consumer may have difficulty in securing a loan  or applying for a credit card. Many consumers with a Credit Report Score in this range are considered subprime.
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  •  A consumer with a credit score between 620 – 679 may encounter restrictions and difficulty obtaining low interest rates.
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  •  A credit score between 680-719 is not perfect, but many consumers in this range don't usually experience problems qualifying for most loans.
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  •  A consumer with a credit score between 720-799 can generally get approval for loans at low interest rates.
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  •  A credit score above 800 is considered flawless credit.

How to improve a Credit Report Score

• •  Build up a solid payment history by paying bills on time.
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  •  Don't max out your credit cards.
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  •  Don't cancel credit cards. Scoring systems consider the length you've had credit.
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  •  Don't apply for too many credit cards and loans. Too many hard inquiries on a credit report can negatively affect a consumer's Credit Report Score.

For more information, visit the NCO Financial Systems, Inc.,(“NCO”) consumer website at www.consumerhelpunit.org.

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