Credit Report and Credit Score - An Introduction

Credit Report and Credit Score of an individual will determine if he is credit worthy or not. The mortgage lenders or loan lenders first check a loan seeker's credit report and score to judge if a person is worthy taking a loan or not. This credit report and score are given on request by the credit bureau.

What is Credit Report?
Credit Report is a compilation of data of an individual's repayment history.

What is Credit Score?
Credit Score is a tally or statistically analyzed data derived by taking the data and content provided by the credit report of an individual.

Both these parameters give a true financial picture of an individual. A person with bad credit report and a poor score will find extremely difficult to land in a loan and vice versa with a good credit report and credit score a person does not face any financial stake whatsoever.

How much is Good in Credit Score?
In general credit score is a three digit figure which is based on the report and ranges from 300-750 but in business terms, a credit score which is in the range of 600-700 is regarded as good and anything greater than 700 is regarded as excellent credit score.

How can you get your Credit Score?
The Federal Government has made it possible to reveal an individual's credit report and score on request and you can view your credit report online with some mean charges.

It should be remembered that bad credit can affect one's credit flexibility but a good credit report can help to pitch in better credit extension.

A check of credit report and score periodically will enable a person to repair and improve it and improve his credit worthiness as well.

Ways to Fix A Poor Credit Score?

Credit score is a dynamic figure and it changes constantly. A credit score below 500 is regarded as poor and repair measures should be initiated to go in the 600 range. It can be done easily. Firstly by paying bills in time and then work out a plan to get back on track and keep up with delayed payments because a single late payment can offset many on-time payments.

Try to keep no or a low balance on credit cards. Never reach a point of maxed out credit card, because it damages your credit score very badly. See that there is always a good difference between the amount of credit and the amount of credit that you're actually using at any point of time.

Do not maintain many credit cards that you don’t use often. Having a large available credit, which's never been used can also hurt a person's score. So keep the cards only you use. Apply for a new card when you really are in need of one.

If you had a financial disaster, do not brood over that, although it is reflected in your report, because lenders do not check your credit worthiness just based on the credit score they do see your current sources of income and also the type of loan you have asked for and they can even approve you for it.