How to Check Credit Score and More! : Facts About Credit

How to Check Credit Score and More! : Facts About Credit

How to Check Credit Score and More! : Facts About Credit

If you are interested in building your credit score, you should have a great interest when it comes to understanding CREDIT itself too. And we are here to give you some Credit and Credit Score facts that you might not know until now.

Brace yourself for this list of credit facts that might change your life as a credit consumer

1. Your credit report might contain wrong credit information

According to the Federal Trade Commission, five percent of consumers have experienced having an error on their credit reports. You should consider this as a warning and start checking your credit report more often.

You can always request your Credit Report every year, so make sure to use it as an opportunity to monitor and check your credit score. It is important to make sure that every data included in it is accurate before making any other financial moves like buying a house or a car.

This will help you avoid future trouble.

2. It's a bad habit to cancel old credit cards

The main and only reason why it's a bad habit is that it can lower your credit score. Oh yes, it can!!

If you have read our past blogs, we have talked about credit history which is one of the factors that affect your credit score. With that being said, keeping your old credit cards or accounts can add up to its percentage.

So if we were you, we will start to avoid canceling our old credit cards now.

3. Credit Reports are FREE

As we've been saying, checking your credit report is important and we are glad to let you know that you can do it for free. You are entitled to get one copy of your credit report from the three nationwide credit reporting companies which are TransUnion, Equifax, and Experian every after 12 months.

If you haven't checked your credit report, you can request your Annual Credit Report.

4. Credits Scores and Credit Reports are completely different from each other

People usually mistake these two as the same, but they are actually different.

A credit score is an average number that tells how accountable and reliable you are with your credits. It allows lenders to evaluate your capacity to pay before giving you a loan.

Meanwhile, a credit report is a collection of your credit transactions such as loan applications, payments, file for bankruptcy, and every activity with regards to your loans and credits.

5. Bad records will not stay on your reports

We are happy to inform you that bad records don't stay on your reports, but they will be on your reports for around 7 years which will affect your financial transactions. So it would be really better to avoid having bad credit records.

6. Your FICO credit score can range from 300 to 850

You must keep yourself aware of your Credit Score so you’ll be able to know when to improve it. Different credit bureaus have different credit score ranges you should be aware of. 

Here are the FICO credit ranges that might be helpful for you:

  • 800–850: Exceptional

  • 740–799: Very Good

  • 670–739: Good

  • 580–669: Fair

  • 300–579: Poor

7.Low credit scores can be costly

A low credit score is a threat when it comes to achieving your financial goals. When you have a low credit score, lenders will consider you as a high-risk loan applicant and you might end up paying a loan with a higher interest rate.

8. There are different types of credit scores

Types of credit scores are based on the credit bureau that reports them. Credit reporters provide different information about your loans and credit history.

It simply means that all of the credit reporters report slightly different FICO credit information to lenders.

9. Bad credits won't stop you from getting a loan

You will be considered to have bad credit if you have a bad history when it comes to paying your bills and credits on time. You can still get a loan despite having bad credit.

But, always remember that you might pay high-interest rates or offer collateral that banks can always seize once you are not able to pay your loan.

10. Most banks and lenders use FICO credit scores when deciding whether to give you a loan or not!

FICO credit scores were founded in 1965 by Bill Fair and Earl Isaac to help lenders make accurate lending decisions. FICO scores are based on the three major credit bureaus which are TransUnion, Equifax, and Experian.

FICO score is used by up to 90% of lenders.

All of these facts may help you build, increase, and monitor your credits when properly used. Always remember that you are not alone on your journey of building your credit score.

You can always ask for help! Visit www.koi.credit now!!

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