What Is A Credit Score?

It seems like a mystery, a whimsical concoction of numbers that are cooked up to label a person, but what is a credit score any way? And, why would it matter?

What is a credit score is a question that many people will find is very important to them the second they make an attempt to obtain a loan or a credit card. Unless a good understanding of what is a credit score is present, it's very likely that mistakes will be made in obtaining and handling credit. This can result in a lower score, which is never good.

To answer the question of what is a credit score, let's take a look at the typical ratings. Every person who applies for credit is assigned a number that explains their likelihood of paying back a loan. What is a credit score cannot be fully answered without understanding a FICO number. This stands for Fair Isaac Company, which is an organization that researches the probability of loan repayment. The resulting number assigned to individuals is a credit score.

Those who need to know the answer to the question of what is a credit score must realize that these numbers are set based on a variety of factors. How much credit a person has, how much money has been committed, how well loans have been back in the past and how long credit has been held will all come into play. A complex formula comes into play to help the credit reporting agencies assign a FICO and determine what is a credit score that's accurate for an individual.

What is a credit score that's accurate for a person will be reported based on a scale of about 300 to 800. The higher the resulting score, the more likely a person is to be able to pay back their debts while having the willingness to do so. The lower the score, the less likely a person is to be able to obtain a loan, or they will find themselves paying higher interest rates.

Anyone who applies for a loan will find the agencies involved will ask themselves what is a credit score that's accurate for the person in question. Inasmuch, if you are interested in getting a loan with a decent rate, it behooves you to ask yourself what is a credit score and how can I make mine better.

The more you understand about what is a credit score, the more likely you are to protect yours. Take care when getting credit to only extend yourself as far as you can comfortably handle and do pay bills on time. If you don't, you might find yourself wishing you never asked what is a credit score! The more responsible you are, the better your score will likely be.

Milos Pesic is an expert in the field of Credit Repair and runs a highly popular and comprehensive credit-repair.need-to-know.net Credit Repair web site. For more articles and resources on Credit Repair related topics, Refinancing, Credit Counceling and much more visit his site at:

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