Your Credit Report Score: Sometimes a Number is Worth a Thousand Words
Contributed by Alix Mcmurray
Your Credit Report Score: Sometimes a Number is Worth a Thousand Words
If you've recently applied for a credit card, mortgage or car loan, chances are you've become somewhat acquainted with the notion of your credit report score. This is a numeric "grade" of your current credit worthiness, and it has a potent effect upon your eligibility for loans, how much interest you will pay on those loans, and the ease with which you can open new accounts for utilities, including phone service and electricity.
An introduction to the notion and applicability of your credit report score is offered here. The reader is encouraged to surf the Internet and purchase credit awareness self-help books to deepen his or her understanding of this complex topic.
Marco...! Polo! Marco...! FICO (Credit Report Score)?!
The most widely used credit report score is the FICO, an acronym for the Fair Isaac Company which developed it a number of years ago. As with the exact recipe of your favorite takeout restaurant's secret sauce or crispy coating, it is cloaked in secrecy.
A Credit Report Score is Not a Logical Number
Particularly in the case of negative factors contributing to your credit report score, it is often difficult to impossible to get a straight answer as to how your score is calculated. Though it is a number, and hence a quantitative assessment of your credit worthiness, in the end it is a numeric interpretation of a qualitative assessment. Garrett Sutton, in his book "The ABC's of Getting Out of Debt" (Warner, 2004)puts it this way, "It's like a golf game where each stroke was based not only on the fact that you swing at the ball but also on wind factors, lighting, and gallery noise."
The three primary credit bureaus -- TransUnion, Equifax and Experian -- all compile data on your use of credit. The scores arrived at by each of these entities may vary for subjective reasons as previously stated. Thus, it is both wise and necessary when investigating your own credit report and score to obtain data from all three agencies.
