Credit Scores  
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Credit Scores play an important role in finances.

When you apply for a mortgage, a car or any other major purchase, the lender will approve your loan and determine your interest rate based upon several factors including your credit score.

Your interest rate may be determined based on how high your credit score is.

Landlords and other credit grantors review your financial history to determine the credit risk. Many lenders use scores to help them make lending decisions, however each lender has its own strategy, including the level of risk it finds acceptable.

A credit reporting agency may only provide a copy of your credit report including your credit score when the request relates to the extension of credit, collection of a debt, housing rental, an application for employment or for insurance purposes.

A total number of points or credit score helps predict how creditworthy you are.

FICO credit scores developed by Fair Isaac Corporation range between 300 and 900. Lenders use this number to determine your credit rating. FICO credit scores are calculated from a lot of different credit data in  your credit report. These percentages reflect how important each of the categories are in determining your score.

35% - Your payment history
Indicates you are paying your credit cards, loan or other payments on time. Other factors include delinquent accounts, past due payments and negative public records or collections.

30% - Amounts you owe
Compares how much is owed against credit limits and the types of accounts you carry balances on.

15% - Length of your credit history
Indicates when a account was opened and the length of time passed since the last activity on accounts.

10% - New credit
Shows how often you are applying for new credit and how you handle accounts you've recently opened.

10% - Types of credit used
Considers the type of loans for example: instalment, revolving, mortgage, car

loans, lines of credit or credit card balances.

A credit score is a number assigned by credit grantors to indicate how likely someone is to pay back a loan or credit card. This number shows the level of risk a borrower might represent and is used as a predictor of future performance.

Credit scores are only one piece of information credit grantors use when evaluating your application. Your credit history information or credit rating is another. Higher scores are considered less of a credit risk, so the higher your credit score the more likely you are to be approved for a loan.

Credit scores can affect more than whether your loan gets approved or not. Your interest rate may be determined based on how high your score is. A credit score can also affect how much you pay for your loan. 

Some credit scores may be based solely on information in your credit file. Other scores may be based on a combination of credit file information and other information you supply on your credit application.

Your credit report is continually updated with new information from your creditors.

A FICO credit score is calculated based on the latest information contained in your credit report at the time the score is requested. So your FICO credit score from a month ago is probably not the same score as today.

A common misperception is that every single inquiry will drop a score a certain number of points. Depending on the overall credit profile, inquiries will usually have a larger impact on credit scores for consumers with a limited credit history and on consumers with previous late payments.

A credit report may include your
credit ratings and credit inquiries.


Check your prospective tenant's credit score and verify whether they have ever been taken to court, paid bills on time, or have any large debts which may effect their ability to pay you your rent. If you are involved in the rental management industry you can obtain your prospective tenants credit report here.

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