Credit Score

Credit score is a numerical score that is assigned to an individual, based upon the information that is contained in their credit bureau profile. The purpose of the score is to evaluate the individual's credit profile and assess the likelihood of them ultimately becoming bankrupt. The higher the score, the less the risk. As a general rule, a score of 680 - 720 is considered very good, scores exceeding 720 are excellent. Each major credit bureau, Trans Union, Equifax & Experian computes a score that is determined by an algorithm which considers several factors including: the individuals history of paying their bills on time, the amount of total outstanding debt, the length of time they have had debt reported to the credit agency, the amount of new debt that they recently have had reported, any tax liens or previous bankruptcy being reported, number of recent inquiries, the ratio of outstanding revolving debt to the total revolving debt available. Ultimately, an applicant's credit score affects the interest rate that he/she pays for all types of consumer loans.