Credit Score Explained
Credit Score Explained. Information on credit scoring. Credit Score basics.
When it comes to getting credit, credit scores are King. Despite the pre-eminence achieved by credit scoring, very people know exactly what it's all about. We take a look at the basic concepts behind credit scores.
What is credit scoring?
In essence, all the information about any accounts you have are kept track of by 3 major credit reporting agencies. They keep a track of such factors as your payment history, the high credit balance, and any derogatory items like late payments or a repossession.
A credit score is derived from all of these factors. Once your numeric score is computed, credit grantors can make a scale and determine whether you qualify for their products at all, and if you do, at what rate. So, as you can see, credit scores have a great deal to do with how much credit and the type of credit you can get.
Negative credit items adversely affect your credit score
The more bad marks you have on your credit report, the lower the credit score. Each derogatory can be represented as a negative number that comes off your credit score and each good payments represents a positive number that will be added to your score. However, not all types of derogatories are created equal, and some can wreak havoc on your credit score worse than others.
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