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Experian Credit Scoring 101
By: JP Burkhart
Your credit score is one of the most important numbers attached to your name.
Your Experian credit score will show you what kind of shape you are in if you
are looking to borrow money or get credit of any kind.
Experian is an international company that calculates credit scores so that
lenders can make an informed decision on whether or not to give you credit.
These are also commonly known as ‘risk scores’, because they help the lender
determine what the risk is that they are taking if they afford you the credit.
Lenders ask questions such as, “How likely is it that I will be paid back the
money on time?” Credit scores are fluid numbers that change often with your
updated credit information.
Everything you do that involves credit—your credit cards, personal loans, car
loans and mortgage loans, all affect your credit either positively or
negatively. If you are late with a payment, it will negatively affect your
score. However, if you pay your bills on time and have them all in good
standing, this affects your credit score positively. Lenders use a variety of
different calculation methods for the scores they give you, which is why your
number changes constantly.
Credit scores are affected by the number and severity of late payments, the
type, age and number of credit accounts, your total debt and any recent
inquiries that ask for your credit score. Credit scores are not affected by any
of your personal data, such as age, race or marital status.
Continue to try to improve your credit score. Pay your bills on time and keep
your balances low on credit cards and other “revolving credit”. A high
outstanding debt can negatively affect your score. You should only apply for
credit as you need it and pay off the debts you have rather than moving it
around. Owing the same amount and having fewer accounts can actually lower your
score.
Keep up to date with your credit score. Experian offers you access to your
credit score, which you can view regularly with a nominal fee. You can then
watch your Experian credit score’s fluctuations and know how you affect your
score.
About the Author:
JP Burkhart recommends that you visit
http://www.creditscoreguide.net/2006/02/experian_credit.html
for more information on Experian credit scoring. |
