In the United States, your credit report is an appraisal reports from either of the three chief agencies, Equifax, TransUnion and Experian, calculated by means of software called FICO.

Banks and other institutions that use scores as a factor in their lending decisions may deny credit, charge higher interest rates, or require more extensive income and asset verification if the applicant’s credit score is low. Unlike in the past, your credit score is now being used as a gauge for lenders and financial administrators to determine your credit trustworthiness. Lenders using your credit score now base their decisions on facts, not on personal feelings or factors like gender, race, religion, nationality, and marital status, thus reducing discrimination in credit approval processes.

We need to first understand the concept of credit scoring. What is Credit Scoring? Basically FICO is a score that is determined by a number of past financial decisions on your part. Paying your bills on time is extremely important to credit score. Payment history has the biggest chunk with approximately 35% of your total appraisal report. Having a low FICO score does not prevent you from getting credit it just makes it much harder and you will pay a higher interest rate for the credit you do receive. Just as people with good credit can be denied.

When you want to purchase a car or acquire a land through mortgage, it is wise to know your credit score. You should regularly check your free credit report and score to keep track of any adverse changes that could lower your score. You can now download a copy of your credit report off the internet and read Credit Score Information yourself. The Fair Credit Reporting Act (FCRA) requires each of the nationwide consumer reporting companies Equifax, Experian, and TransUnion to provide you with a free copy of your credit report, at your request, once every 12 months.

Considering how great an impact your credit report score has on your financial life, it is therefore only natural that you’d want to learn as much as you can about improving it. So what are credit report scores based on? Having a long credit history will positively impact your credit scores while short credit history usually means you are a risky borrower. Do not use those credit cards you don’t need and consolidate your debt further than 35%. At times when you need a bit help in fixing credit scores, call the credit experts and see the difference when someone fights for you. Fixing credit score is huge task because it involves a great deal of dedicated thinking and discipline.

Using and maintaining credit is an important skill in today’s times. Although credit terms and scores can be confusing learning to navigate your way through the credit language will help you maintain great credit.