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This infographic highlights the may components that comprises personal credit scores. Learn what make up your credit score and the average credit scores across the United States to see how you measure up!
- The definition of a Credit Score
- Credit Score Factors
- Credit Score Statistics
What is a credit score?
In brief, a credit score is a number based on the statistical analysis of a person’s credit history. lenders use it to determine the creditworthiness of a potential borrower. They also use the credit score to determine the risk associated with lending money to the borrowers. It helps lenders determine the terms of the money lent should the applicant be approved. Terms include interest rates, loan or credit limits, how long you will have access to the money, and/or when you are required to pay it back. Good credit scores and histories are what borrowers use to gain trust with lenders.
Credit Score Factors
Credit score factors are what make up your credit score. These factors are what credit scoring companies like the Fair Issac Corporation and lenders use to determine your credit score. If you concentrate on managing your credit well in these areas, you will be able to increase your credit score to a number that is favorable to lenders. this image outlines what factors make up your credit score.
Credit Score Statistics
The image below provides information on what type of interest rates to expect from lenders based on your credit score. If you are thinking about applying for a loan or line of credit, this chart will help you understand if you qualify. FICO Scores are used by 90% of the baking the lending industry. VantageScores are used by the other 10%. Knowing how your credit scores measures up in comparison to everyone else will help you determine if your credit score is where it needs to be (based on your age).