Your credit score is essentially a reflection of your ability to pay back
the money you borrow. The better your score is, the easier it will be
to take out a mortgage, car loan, lease, credit card or other forms of
credit from lenders like banks and stores. Information about your our
credit score is contained in your credit report, which is used by lenders
to decide whether your request to borrow money should be approved.
There are three major credit reporting bureaus: Equifax, Experian, and
Trans Union. Credit reports contain a list of all your lenders and your
payment history. Your credit report might also include:
- The companies or people you have applied for credit with.
- Your name, your spouse’s name, your address, and social security number.
- Your annual income and the name and address of your employer.
Information about any lawsuits, foreclosures, repossessions, and any previous
bankruptcies you have filed for.
- Information about any tax liens that have been filed against you for unpaid taxes.
The information in your credit report can be viewed by potential lenders
and insurance companies to asses whether it would be risky to lend you
money. Some employers use credit reports to evaluate job applicants, while
landlords will use them to see how likely you are to pay your rent on time.
All of the information on your report is used to assign your credit score.
Your credit score is a number that rates and ranks your worthiness for
credit when compared with the public at large. The most well-known scoring
systems is the Fair Isaac Corporation (FICO) Credit Score. FICO scores
range between 300 and 850. 40% of the population has a score of 690 or
lower, while 40% have a score 745 or higher, and just 20% have scores
The single greatest factor used to figure out your credit score is your
debt to income ratio. Even if you don’t have outstanding or an unpaid
balance on your credit card, your credit limit will still be added to
the debt portion of your debt-to-income ratio. The length of your credit
history and the number of recent credit applications submitted to potential
lenders also contributes to your credit rating. Applying for credit with
too many lenders can negatively impact your credit score.
Do you need help rebuilding your credit? Contact our team of St. Augustine bankruptcy lawyers
to talk about what forms of debt relief
might be available for you.