What is a Credit Score?

A credit score comes in numerical form, the number is a summary of your historical credit information as reflected on your credit report. The number shows your ability or inability to meet up with a loan or other forms of credit obligations in the future.

Who Calculates My Credit Score?

A lot of different businesses calculate your credit score. Each of the credit bureaus – TransUnion, Experian and Equifax, including FICO (the company that structured the popular FICO score) calculate your credit score. Also, your credit score is calculated by certain banks, and these banks may engage third-party vendors to calculate your credit score as well.

What is the Basis of the Credit Score Calculation?

The calculation of your credit score is usually based on the information contained in your credit report, regardless of who does the calculation. The credit bureaus are responsible for compiling your credit report. The three credit bureaus obtain the details of your accounts from your creditors.

At the different businesses, your credit score may differ, it also depends on your credit report in use, as well as the differences that may exist within the credit scoring algorithm used by these businesses. Generally, the calculation of your credit score is based on some types of info on your credit record, which include your total debt, payment history and your current credit applications.

What Score is known as Vantage Score?

The credit score jointly developed by the three credit bureaus (Experian, Equifax and TransUnion) is known as vantage score. The same formula is used for the vantage score across all the major reporting agencies. Consequently, more accurate and consistent representation of your credit history is derived.

I Don’t Have a Credit Score, Why is it So?

If you do not have a credit score, one thing could be responsible – you simply have little or no credit history. The credit scoring models require sufficient credit information to generate a credit score.

How Frequent Do Credit Scores Change?

As your credit report changes, your credit score changes as well. So, since your credit report receives new information all the time, your credit score can change as often as possible.

What Score Range is Used for Vantage Score?

The vantage score uses scale, and this unique feature is simply outstanding. The score range starts from 501- 990; this is in groupings that round off the well-known academic scale. Thus, understanding your credit score is easier.

Here’s the vantage score range at a glance;

• A: 901—990
• B: 801—900
• C: 701—800
• D: 601—700
• F: 501—600 – This range points to high risk.

Don’t forget that the market has wide range of credit scores, so the score range will vary depending on the model.

What is Considered Good Credit Score?

Basically, ‘good credit score’ is relative. Since the scoring systems and scales differ, the scoring system in use by your lender would determine what a good credit score is (for you). But, a credit report and credit score from Experian will give you an excellent idea of your credit score status – whether it is good or otherwise. If your credit score from Experian is ‘good’, then your credit score with your lender would be good as well.

…we will come back with more credit score FAQs and answers from an expert.