A credit rating or credit score represents your capability of paying back borrowed money or settling a loan. It is a kind of predictive analysis which is used by the credit industry, mainly by the three credit bureaus in America namely Equifax, TransUnion, and Experian. It is because of this concept that the US became the largest economy in the world. But there is so much an average person doesn’t know about credit scores, which leads to many misconceptions and misunderstandings. There are various myths in the minds of people about credit scores.
So, to help you understand about credit scores and clear all your misconceptions, here are 10 things you must know about credit scores:
Credit pros use two databases to calculate the credit score of an individual: credit bureau information and accounts receivable. But since the compilers that are widely accepted by FICO (FairIsaacs Corporation) Credit Score allow lenders to customize and form their own systems, different lenders create different scores.