Five Common Credit Score Myths

Your credit score is an integral component of your financial life. It’s essential that you understand what it’s all

about. Lenders, landlords, insurers, utility companies and

perhaps even employers look at the credit score of yours. It is derived from

what is in your credit reports, as well as it ranges between 300 and also

850.

report contains errors (such as wrong information about debts)Nonetheless, based on a survey that has been recently conducted,

nearly half of all Americans do not know how these scores are derived or even what factors are used to come up with them.

For instance, if the credit score of yours is 580 you are probably

going to pay nearly 3 percentage points more in mortgage interest compared to someone that had a score of 720.

Or maybe another way of looking at it, if you’d a $150,000 30-

year fixed-rate mortgage and your credit score was good

sufficient to qualify for the most effective rate, your monthly payments would be aproximatelly $890. This is according to Fair Isaac, the

company which made the FICO score and who the rate is named after (Fair Isaac COrporation). If perhaps your credit is

inadequate, nevertheless, it’s quite possible that you would have to shell out greater than $1,200 a month for that same loan.

With so much based on the credit score, it’s important

to understand what it is all about and what are the things that affect it.

Unfortunately, people commonly have a great deal of misinformation and misunderstandings about the credit score of theirs. The following are

five of the most popular credit score myths and along with it

the real facts:

MYTH #1: The main bureaus use different formulas for calculating the credit score of yours.

find out more hereFACT: FreeScore360 (what is it worth) The 3 major credit bureaus – Equifax, TransUnion and Experian — provide the score an alternative title. Equifax

calls the score of theirs the “Beacon” credit score, Transunion

calls it “Empirica” and Experian gives it the title “Experian/Fair Isaac Risk Model.” They each use different

names for the credit score, but they each use the identical method to come up with it.

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