Your Credit Score

A credit report is basically a history of your financial transactions in which credit was involved. It includes data collaborated from multiple sources of financial information, but does not necessarily reflect all your credit transactions. The information contained in a credit report includes details such as: who you currently owe money to, if you are or have been late in making payments to creditors, some information on financial institutions you deal with, and even things like missed child support payments.

Personal details also are given in your credit report, like: your Social Security number, name, phone numbers (even if it's unlisted), address, recent previous addresses, birth date and info on your employment history. Also contained in the report are public record matters like civil judgments, bankruptcies and tax liens.

Right now, three large national credit bureaus that basically control the credit reporting industry: TransUnion, Equifax and Experian . These three credit bureaus combined run nearly 1.3 billion credit reports annually, and each of the three bureaus has approximately 225 million consumer credit files on record.

For quick review by prospective lenders, the report is synopsized by a credit system known as your FICO score, which ranges from between 300 to 850. Scores over 720 are considered to be a fairly good credit rating, and anything close to or above 800 is outstanding. On the flipside, a score of 600 or less is considered a poor rating, and will likely affect your ability to get new credit and the rates offered when you are able to find willing creditors.

While you probably don’t give it much thought daily, when trying to borrow the importance of a good credit score will become obvious. Prospective lenders will use the information from your reports to decide whether they should extend a loan and what kind of rates to offer.