Impact Fusion

Thanks to the freecreditreport.com commercials, most of us are familiar with the concept of a credit report. It is a compilation of our bank accounts, debt, and repayment history. While a credit report is important for staying on top of our credit there is something even more important that lenders look at —  your credit score . Your credit score is a three-digit number between 300 and 850. It takes all of the information in your credit report and turns it into a number that lenders can look at very quickly to determine whether or not you are a safe risk. The formula for creating your credit score was developed by a company Fair Isaac & Co. and so the term FICO score is used synonymously with credit score. A good credit score is required to receive most traditional loans; however there are some institutions, such as payday lenders , that don’t do any credit checks at all.
There are five key areas that FICO looks at when developing your credit score; the payment history, the amount owed, the length of credit history, the types of credit in use, and new credit. The biggest area that effects your credit score is your payment history. Each time you are late on a payment, your credit score gets dinged. This even affects payday loans you receive from Money Mutual . Even though they don’t run your credit when you apply they still must report to the credit agency, so if you default your credit will still be affected. When FICO is looking at the amount you owe, they are looking at the ratio of debt to credit. If that ratio is high, for instance you have nearly maxed out your credit cards, then you are seen as a higher risk than someone who has only used 30% of their credit. Although they make up smaller portions of your overall score how long you have been establishing credit, the type of loans that you have, and any new loans or credit cards can still make or break your score.
You can purchase your FICO score online . It is the best way to see where you stand and start making improvements.