Credit Score Basics

Almost everyone's life revolves around credit, but it can be difficult to comprehend what it is and how it operates.  Knowing the basics of Credit Scores and Credit Reports can help you better understand the role credit plays in your life and provide you more power as a consumer. 

Your likelihood of repaying a loan on time is indicated by your credit score, which is a number based on the information in your credit file; the better your score, the lower risk you are to lenders. 

While several criteria, such as your salary and the type of credit you're seeking, are taken into account by lenders when deciding whether to grant credit, your credit score solely reflects the data in your credit report.

Your credit report contains a wide variety of credit data from which credit scores are derived. Five categories can be made from this data. 

1. Payment History
2. Amount Owed - Available Credit
3. Length of Credit
4. New Credit
5. Types of Credit Used