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Understanding Credit Scores

These days, your credit score is more important than ever. Not only are lenders using credit scores to price loans, but landlords and employers are looking to these to judge an individual's character. Having insufficient or poor credit can prevent you from obtaining loans, and in some cases, from getting a new job or apartment.

Your FICO score is based on a variety of factors. Although your score is not the only factor that goes into making a loan decision, it is universally used by almost lenders for qualification and pricing purposes. When you apply for and obtain credit, your creditors report your payment history to the credit bureaus. There are three major credit bureaus in operation: Equifax, Transunion, and Experian. These bureaus generate a score based on your history, which creditors pull and analyze when you apply for credit. Your score is weighed (roughly) by:
  • Payment history (35%)
  • Capacity (30%)
  • Length of credit (15%)
  • Accumulation of debt in the past 12-18 months (10%)
  • Mix of credit (10%)

If you have a low credit score, there is some good news - it's never too late to turn your financial reputation around. Come on in to either of our branches and we will do a free credit report analysis. We have the tools and the know-how to help you rebuild your credit. Give us a call today!