What is in a Credit Score

Let us see what is in a credit score?

When you apply for credit--whether a credit card, ear loan or a mortgage--lenders want to know what risk they'd take by lending money to you. The Fair Isaac Corporation (FICO) scores are the credit scores most lenders use to determine your credit risk-the higher the score, the lower the risk. You have three FICO scores, one for each credit bureau--Equifax, Experian, and TransUnion.

The method used to calculate the credit score is that data is grouped into five categories with percentages that reflect how important each of the categories is in determining your score.

Your credit score can be friend or your enemy, and by maintaining good credit, your score can actually put more money into your pocket.

The higher your credit or FICO score, the less you'll pay in interest and the more you can effectively manage and accumulate wealth.A low credit score means that you will pay a higher interest to borrow money and/ score.Another reason to manage your credit wisely to earn a high credit score is to make a difference in employment and insurance premiums.