Hello and welcome to Lexington Law Firm!
Today in this clip we’re gonna discuss the importance of credit scores and how to better understand your credit score. So you may be asking what is a credit score? What builds a credit score? That’s what we’re gonna chat about today.
Online you may find all sorts of different offers and advertisements about finding your credit score, better understanding your credit score, or what is your credit score versus your FICO score? Today we’re going to discuss a little bit about the difference between the two and what builds up your credit score.
The credit score was created to predict the likelihood that you won’t pay your bills. Your credit score can be used by many different professionals such as mortgage lenders, car loan lenders, and credit card companies. These days even landlords, cell phone companies, and even potential employers will use your credit score to determine whether you are a good or bad credit risk.
So essentially people such as lenders, banks, credit card companies, phone companies, even potential employers are gonna look at your credit score and determine whether or not you understand how to use your finances, if you have a good payment history, whether or not you been paying your bills on time, and essentially determine or make a decision on whether or not you are credit risk.
Most consumers assume that their mortgage lender or even the car dealership that they’re going to apply for a new car for are seeing the same credit score that they see when they look online. Unfortunately most mortgage professionals and car dealerships are using the actual FICO score to determine whether or not you’re a credit risk.
So if you are checking your credit score online it may be wise to look at a certified FICO score where you could find this is: myFICO.com
So as a quick credit score overview your credit score is a three-digit number ranging from 300 to 850. 300 being a bad score 850 being a good score. The credit score predicts the chances of you going delinquent on any given account. Your score helps lenders know the level of risk you represent in any given moment. And as your score is derived from Bureau data, it will change every time your credit reports change.
So hopefully you’ve enjoyed this small clip about what a credit score is. Hopefully you can learn and understand a little bit better why the credit score so important and later on we’ll discuss what builds a credit score and how to better yours.