Learn Credit Basics: Credit Score

A credit report contains your identifying information as well as your credit history. Overall, your credit report includes information such as:

  • Your payment history
  • Your loans
  • The number of your active accounts
  • The number of your new accounts
  • Public records (arrests, lawsuits, etc.)

The report basically sums up your whole financial history. Your credit report will be given a score depending on your credit history.

What is a credit score?

Your credit score is determined based on how responsibly you have managed your credit in the past. If you have done a poor job managing your credit, you will have bad credit. If you have done a good job of managing your credit, you will have good credit.

Good Credit

A good credit score is anything from 670 to 850; this is excluding the fair credit score range of 580 to 669. You will receive a good credit score by paying credit back on time or even early. Generally, being a good debtor to your lender will help you get a higher credit score.

A good credit score will tell all your future lenders that you are a responsible borrower. The advantages of having a good credit score include:

  • More lenders are willing to give you credit
  • Lower rates on loans or financing
  • Better terms on loans

Overall, the better credit score you have, the easier it will be to receive credit from lenders. The same cannot be said for having a bad credit score.

Bad Credit

A bad credit score can range from 300 to 579; this range does not include the fair credit score range of 580 to 669. You will get a bad credit score when you miss payments or are late paying back your lenders.

Having a weak credit score will be like having a financial storm cloud over your head. A bad credit score will cause you to financial disadvantages such as:

  • Being rejected for financing by most lenders
  • Higher rates on loans or financing
  • Worse terms on loans

Overall, a bad credit score will make it hard for you to get reasonable rates on new purchases, if you can even find a lender that will accept you.

How Your Credit Report Is Used

Your credit report will be used by lenders to get a very specific idea about what kind of debtor you are. They will be able to see how often you paid your credit back on time or how often you have missed payments. Lenders can see all the information listed on your credit report and other related financial history. Each lender has their own criteria for accepting debtors depending on your credit score. Generally, lenders will be more eager to accept a person with good credit over a person with bad credit.

The importance of your credit report means that it is vital for you to ensure its accuracy. It is your responsibility to make sure that there are no mistakes on your credit report. Often a person’s bad credit score can be blamed on an error made in their report. Zinu Credit Repair is here to help you find any errors that might be causing you bad credit. Make sure to get in touch with Zinu Credit Repair at (800) 400-ZINU (9468) today!


Learn more about the Basics of Credit here