How Well Do You Understand Your Credit Score?

The three little numbers that make up your credit score may seem like something of a mystery. However, for residents of Tampa Florida trying to purchase a new home find out quickly just how important a credit score really is. Your credit score impacts quite a bit, and may even have an effect on whether or not you’ll get that big job you’ve had your eye on.

Essentially, your credit score is a simple way of showing your credit worthiness, and if you have a record of being able to repay the money you’ve borrowed. This number will be used not only to determine if you’re likely to pay back debts, but what types of interest rates you’re like to see as well.

Learning About Your Credit Score

After determining how important credit scores are, Tampa Florida residents will want to learn more about their credit scores and what exactly impacts them. Some important facts about credit scores include:


· The big three – You may have three different credit scores, and this is your score according to the three big credit reporting bureaus. These are Experian, Equifax, and TransUnion, and your score according to each may differ from one another.


· How your credit score is calculated – Quite a bit goes into a credit score, and many Tampa Florida residents don’t realize just what their score tracks. Your payment history creates the biggest impact on your score with 35%, followed by the amount of debt you owe with 30%, the length of your credit history with 15%, the amount of new credit requested with 10%, and the types of credit you use with 10%.


· Your credit score range – Your FICO credit score, the most common type of credit score, will range from 300 to 850. 850 is considered perfect credit, which is quite a challenge to obtain, while a lower credit score near the 300 mark will require some work before you’ll begin to see any credit benefit.


· A good score – Typically, right around 720 is considered good credit, and those with a credit score between 740 and 850 are the most likely to enjoy the lowest interest rates.


· What your score determines – Essentially, your credit score helps businesses and lenders determine how likely you are to pay back debts. Specifically, the odds you’ll go 90 days past due on your debts (and therefore go into default) in the next two years. Those with a high credit score show that they’re least likely due to their past credit history.


Building Your Credit Score


Consumers are entitled to one free credit score check ever 12 months, and this can help Tampa Florida residents looking to improve their credit to see just where their credit stands. The best way to make improvements in your credit score is to be patient, and pay all bills on time, reduce your debt, and ask that any bad debts be marked paid on your credit score after they’ve been paid off.