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Credit Report FAQ

Payment History Legend

Credit Score

Your Credit Score is a numerical representation of your credit risk on a scale very similar to those used by lenders. Your credit score is based on the information contained in your credit report.

Financial institutions often use credit scores to help determine your creditworthiness for credit card approvals, mortgage lending, setting insurance premiums, and much more. Your Credit Score is determined using many of the same factors considered by leading credit scoring companies. To better understand these factors, please see your Personalized Score Analysis. The higher your score, the better, since a higher score indicates you are less risky to lenders. By understanding your current level of credit risk, you will know what kinds of offers you can expect and avoid surprises when applying for a loan or credit card. By identifying the factors affecting your credit, you can learn to better manage your credit and get better loans.

Since there are 3 major credit bureaus in the US (Experian, Equifax, & TransUnion), you actually have 3 different credit reports. Each one is based on the information that lenders have reported to that individual bureau. In the same way, you have 3 different credit scores – each based on one of your credit reports. Because a lender can report your information to any of the bureaus (some lenders report to all 3 bureaus, while others may report to none or only 1), your credit report at each bureau often contains different information. If there are differences among your 3 credit reports, your 3 credit scores will reflect these differences, as well.

It is important to note that each of your credit scores will change over time, just as the information in each of your credit reports will change. In fact, your score can actually change from day to day, since it is based on the information in your credit report on the day your score is calculated. We recommend periodically checking your credit score, score analysis, and credit report in order to be aware of your total credit picture. 

Different Ways to View Your Credit Score
Your Credit Score is a three-digit number that represents your credit rating. Using a scale widely accepted by the lending industry, the majority of Personal Credit Scores are between 400 and 900. Higher scores are better.

Category Ratings
The Credit Category Rating provides an easy way for consumers to evaluate their credit and understand what types of loan terms (such as interest rate, credit line, fees, etc.) they can expect when applying for credit. This snapshot of a consumer’s credit is based on general industry guidelines. Although each lender has different criteria, you will most likely receive the best loans and terms if you fall in the “Excellent” category. If you fall in the “Very Poor” or “Poor” categories, you will probably receive less favorable loans and terms. 

The Percentile Value
Your percentile ranking is computed using a distribution of Personal Credit Scores based on over one million credit reports and reflecting the natural distribution of the US population. This provides an easy way for you to compare your credit rating to the rest of the U.S. population’s. For example, if you rank in the 90th percentile, your credit rating is higher than 89 percent of the U.S. population. The higher your percentile ranking is, the more likely you will be able to receive good loan terms. 

Some statistics about the score distribution (percentiles):

• 15% of the US population is below 600
  
• 35% of the US population is below 670
  
• 50% of the US population is below 710
  
• 70% of the US population is below 755
  
• 90% of the population is below 790

Your Credit Score is calculated using information from your credit report on the day it is calculated. It is based on over 80 factors grouped into 6 classes:

• Payment History – Information about the way you paid your credit accounts in the past, including late payments and bankruptcies.
  
• Credit Accounts The number of credit accounts that you have andthe different types of those credit accounts (e.g. credit cards, auto loans, etc.).
  
• Credit Usage – The amount of credit you are using, and the amount of credit still available.
  
• Length of Credit History – The number of months your credit accounts have been on your credit report.
  
• Credit Applications – The number of times you have applied for credit in the recent past.
  
• Bankruptcies – The presence and age of bankruptcy records (if any) on your credit report.

With many lenders using credit scoring as a significant part of their loan process, it is extremely important to know the reasons that make your score higher or lower. In fact, knowing the reasons behind your particular score is more important than knowing your score itself. This knowledge enables you to proactively manage your credit so you can get better loans.

The negative and positive factors listed on your Personal Score Report are based on actual data from YOUR credit report. By improving your negative areas and continuing your positive actions, you will be able to improve your credit rating. 

Factors Not Used

Factors that are NOT used in calculating your Personal Credit Score include age, sex, and race. These factors are excluded from credit scoring to eliminate bias and discrimination from the decision process. Only the information from your credit report is used to calculate Your Credit Score.

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