Credit Report Scores
Each of the major 3
credit reporting agencies receives information from credit
grantors such as credit card companies, stores granting credit,
mortgage companies, and banks. The agencies compile your credit
history and compute your credit report scores. They then provide
your history and scores to others who have a genuine interest in
your credit worthiness.
Your scores are based on factors
that appear in your credit reports:
- Bill payment history (Good: on
time and for the full amount)
- Total outstanding debt (Good:
non-mortgage loan payments less than 5% of gross income)
- Types of debt (Good: mortgage,
car loans, Bad: high credit card debt)
- Length of credit history (Good:
3 or more years of on time payments)
- Credit inquiries (Bad: many
rejected applications)
The Equal Credit Opportunity Act (ECOA)
prohibits certain factors from being used in determining your score:
- Personal details such as sex,
marital status, age, race, national origin, or because you
receive public assistance income.
- Sources of income such as
regular alimony, child support, or separate maintenance payments.
The Equal Credit Opportunity Act
provides actions for you to take if you suspect unauthorized
factors are being used to deny you credit.
To see your credit report scores, request
a copy of your credit report from each of the major credit reporting
agencies.
As an alternative, many web sites
offer free
instant credit reports.
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