This year will bring consumers opportunities to access their credit score online. Credit Scores are the three digit numbers that lenders use to decide whether to lend you money and at what interest rate. Historically, the credit score is a number between 300 and 900. The rational is that the higher the score the less risk there is to the lender that you will not repay the loan.

Fair, Isaac and Company, the credit scoring standard, provides credit bureaus (Equifax, Trans Union and Experian) with a credit score formula. The bureaus use the formula to generate numbers, which are known as FICO scores.

A credit score or FICO score gives you a look at how your credit rating compares to that of average U.S. consumer. A credit score is derived from information in your credit report and can range from 330 to 830, with a higher score indicating lower credit risk. Using the latest data on U.S. consumer spending habits, your credit rating will help you learn the factors that drive your score up or down so you can improve your overall credit rating.

How Your Credit Score or Credit Rating Is Determined:

1. Payment History: Approximately 35% of your credit score or credit rating.
2. Amounts Owed: About 30% of your credit score or credit rating.
3. Length of Credit History: About 15% of your credit score or credit rating.
4. Pattern of Credit Use: About 10% of your credit score or credit rating.
5. Types of Credit in Use: About 10% of your credit score or credit rating.

Credit Score and Credit Rating Guidelines

650 and Above

In general, a credit score or credit rating of 650 or above indicates a very good credit history. People with these scores will usually find the loan process quick and easy, and will have a good chance to obtain a loan at a relatively low rate of interest.

620 to 650

Credit scores and a credit rating between 620 and 650 indicate basically good credit. (Average FICO scores fall into this range.) People with scores in this range have a good chance at a loan at a good rate, but may have to provide additional documentation and explanations to the lender before the loan is approved.

Below 620

A credit score or credit rating below 620 may prevent a borrower from getting the best interest rates, as they may be considered a greater credit risk-but it does not mean that mortgage funding can't be found.

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