Understanding Credit Scores

Study Notes

Credit score range: 300 - 850
Higher credit score is better as it helps you get better loans and interest rates
Lenders use credit reports to determine creditworthiness and risk
Credit reports contain information on your payment history, loan balances, account opening dates
It does not include checking account balances
Reviewing your credit report regularly helps monitor factors affecting your credit score and check for accuracy
Only about 58% of Americans know their credit score
"Thin File" refers to a credit report with little credit history
You can get a free copy of your credit report at AnnualCreditReport.com

Missing a payment has more impact on a higher credit score than a lower score
It is advisable to request your credit report from all three agencies to ensure accuracy as each agency may have slightly varying data
Financial records generally remain on your credit report for 7-10 years
An 18 year-old typically has a thin credit file because they are just starting to build credit
Some services offering "free credit scores" may charge for updates
Some credit card companies offer free credit scores to boost cardholder loyalty

The Equal Credit Opportunity Act prohibits denying credit based on race, sex, or religion
It is important to review your credit report from all three agencies as they each report slightly different data
Lenders check the credit accounts section of your credit report to evaluate your financial history

When lending money to someone you do not know, it is important to understand the purpose of the loan and their monthly expenses
Loan payment history is included in your credit report