Guide to Understanding Credit Scores

A credit score in the United States is a number that shows how good someone is at managing money and paying back loans. Lenders, banks, and other companies use this score to decide if they should give someone credit or a loan. Here is a simple guide to help you understand credit scores and how you can check your own score. 
 

Credit Score Table in the United States 

Credit scores in the United States come from information in reports made by three big credit agencies: Equifax, Experian, and TransUnion. These reports include details about your payment history, debt amount, how long you’ve had credit, types of credit accounts, and other important information. 
 

The most common credit scores in the U.S. are called FICO (Fair Isaac Corporation) scores, and they range from 300 to 850. A higher credit score, usually over 700, means you are good at managing money and paying back what you owe. This can help you get approved for loans with better terms. Below is the credit score table used in the United States. 

Score Range

800-850 = Exceptional

740-799 = Very Good

670-739 = Good

580-669 = Fair

300-579 = Poor
 
What Affects Your Credit Score 

It’s important to check your credit score often and review your credit reports to make sure everything is correct. A good credit score can help you get lower interest rates and more chances to get loans and credit cards. 

Here are the main things that affect your credit score: 

• Payment History: Whether you pay your bills on time. 

• Credit Utilization: How much of your available credit you are using. 

• Credit History Length: How long you have had credit accounts. 

• Types of Credit: The different kinds of credit accounts you have (like credit cards, loans, etc.). 

• Outstanding Debt: How much money you owe. 

• New Credit Applications: How often you apply for new credit. 
   

How to Get a Copy of Your Credit Report 

You can get a free credit report every 12 months from the main credit reporting companies: Equifax, Experian, and TransUnion.  

Here’s how you can get your report: 

• Online: Visit AnnualCreditReport.com. 

• By Phone: Call (877) 322-8228. 

• By Mail: Fill out the Annual Credit Report Request Form and send it to: 
  Annual Credit Report Request Service 
  P.O. Box 105281 
  Atlanta, GA 30348-5281 
   

You can request all three reports at once or one at a time. Getting them separately can help you monitor your credit throughout the year. After getting your free annual report, you can also buy additional reports for up to $12.50 each. 
 
You can also receive free reports from consumer reporting companies. 

Remember that you will need to request reports individually from each of these companies. Several of the companies on this list may provide a free report every 12 months while other companies may charge a fee for the service. 

Getting Additional Free Reports 

You can get another free report if: 

• You were denied credit, insurance, or a job because of your credit report. Request the report within 60 days of receiving the denial notice. 

• You think your report is wrong due to fraud. 

• You placed a fraud alert on your report. 

• You are unemployed and plan to apply for a job within 60 days. 

• You are on public assistance (like welfare). 

• Your state law gives you the right to a free report. 
   

Be careful of websites that say they offer free credit reports but might charge you for other services.  
 
To get a free and legal credit report, visit  
AnnualCreditReport.com or call (877) 322-8228. 

The original article can be found here on La Red Hispana.