Tweet

What Is A Credit Score?

Guest post by: ross jackson

Article Overview: A credit score is a number assigned to you to give a numerical assessment of your credit history. It is a three-digit number ranging from 300-900, 300 being the worst and 900 the best. This number is assigned by the reporting credit bureaus based on your past credit history

What Is A Credit Score?

A credit score is a number assigned to you to give a numerical assessment of your credit history. It is a three-digit number ranging from 300-900, 300 being the worst and 900 the best. This number is assigned by the reporting credit bureaus based on your past credit history. When applying for a loan, this is the number the creditor will look at to help make a determination in whether or not to approve the loan. There are other considerations such as income and how much debt the consumer already has that are taken into account, but the credit score is the most important aspect of loan approval.

The number is considered to represent the creditworthiness of the consumer and plays a critical role in the loan approval process. It provides the lender with the probability of default of the consumer based on their credit history. In other words, it gives the lender an idea of how likely the consumer is to pay back a loan if offered. If the consumer’s credit score is low, any loan application is apt to be denied, or at best, it will require a co-signer, (An individual with a good credit score who will sign the loan and guarantee that all payments will be paid. They also have to be approved and are as responsible for the loan as the person they’re co-signing for), or in some cases collateral will need to be provided.

The closer the consumer’s credit score is to 900, the more confidence a lender will have and the more likely they will offer approval of the loan. As mentioned, there are other considerations in the loan process. If the consumer has a credit score of 875 but no income, or judgments and/or liens against them, or any combination thereof, the chances of securing a loan go down drastically. Each lender has its own procedures for screening a loan application based on a credit score and the credit score number used could vary substantially. The credit bureau does not dictate or recommend what credit score a lender should use as its cutoff point.

Related Articles
  Why A Good Credit Score Is Important To Your Business
  Seeing Your Free Credit Score
  What affects your credit score?
  Bad Credit Car Loans - Getting a Auto Loan Financing With Bad Credit
  Fico Score - What is it and How Does it Affect Me?
  Your Fico Score Is An Important Piece of Information That You Should Always Know About Yourself
  How to Get a Online New Car Loan with Bad Credit
  Your Credit Score is an Important Tool for Good Money Management Practices
  Improving Credit Score - Good Credit is Essential to any Business
  CREDIT SCORES: WHAT AFFECTS IT AND HOW IT AFFECTS YOU
  What the Heck are Business Credit Bureaus?
  Changes to Your Credit Score
  You Can Refinance Your Car Loan
  Mortgage Rates Canada - How Credit Scores Affect The Rate You Get?
  No Credit Auto Loans and Car Loans for Those Who Have Bad Credit Rating
  Low Interest Rate of Car Loan for Bad Credit Buyers
  Get Guaranteed Bad Credit Car Loans & Auto Financing for Used and New Cars
  When selling a business check the business buyers credit history
  Business funding sources for today's business owner...
  I Want To Improve Your Credit Score, But You Won't Let Me Help!

Article Tags: credit score, finance, lending



Related Forum Posts
Re: 100 days to says goodbye to 2009 - The game isn't lost yet. Look at what Sir Alex Ferguson trained Manchester United players to do... Score the winning goal in injury time.
Building credit - Credit is like reputations, I suppose. Takes a lifetime to build, and only a second to destroy.
Marketing and PR ideas related to a Credit Organization - Hello Everybody! I would be very grateful if you suggested some PR and Marketing ideas for a Credit Organization which target market is poor public who live in village and haven't any access to the internet. Thanx in advance
Offer Credit instead - I'm not sure if ChrisH was referring to this but i'll state it more expicitly .. Charge upfront and offer a refund of double the value back in "Credit" towards your Product or Service you have for sale at the end of the event.
Research & Dev Tax Credit - at No Cost (Canada) - Brian, I have a colleague that can provide you guidance and even assist in maximizing a R&D Tax Credit from the Government of Canada (If you are Canadian). All this at No Cost to You. I know her well and have referred other people to her. She's got plenty of experience in the field. If you're interested (anyone else on this forum too) just send me a PM and I will share her details with you.


Share this article with your friends. Fund someone's dream.

Leave a comment below or share on the left and you'll help support entrepreneurs in Africa through our partnership with Kiva. Over $50,000 raised and counting - Please keep sharing! Learn more.

Newsletter

Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!

Name:
Email:

Popular Articles

Setting Goals for your Home Based Business

Getting The Media Attention You Deserve

Qualities of Leadership Part 1

Suggestions

Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.