Credit is essential for borrowing
money. Your credit worthiness is rated by the three credit reporting
agencies and FICO. The scores represent the likelihood that a person
will repay their loans, and it's determined by a person's borrowing
history and other variables. Below are answers to frequently asked
questions about credit, credit reports and credit scores. If you have
additional questions, don't hesitate to contact our Finance Department.
I have bad credit, what should I do?
If you have less than perfect credit,
don't fret; you're not alone. Millions suffer from bad credit because of
a variety of reasons. To improve your credit, start by getting reports
from all three reporting agencies. This will shed light on what exactly
is impairing your credit. Credit reports may contain inaccuracies that
you can correct to help get your credit back on track. Paying down high
balances and paying on time will go a long way to improving your credit.
What is a credit score?
A credit score represents your
creditworthiness and it's used by lenders to gauge whether a person will
make payments on time. Scores are largely based on your borrowing
history. The most common type of credit score available to consumers is
the FICO score, which ranges from 300-850. The higher the credit score,
the more likely you'll be able obtain credit and/or secure a lower
What is a good credit score?
Credit scores range between 300 and 850. Typically, a good credit score is above 700.
What is a bad credit score?
The average credit score is 680. Anything below 620 is considered a poor score, or "sub-prime."
How do I maintain a good credit score?
For those who already have a good
credit score, rest assured that it's much easier to maintain a good
score than to improve a poor one. Good credit can be maintained by
adhering to healthy financial habits, such as making payments on time
and shopping on credit only when it's absolutely necessary. Avoid making
dramatic credit changes and don't close old accounts.