Your credit report & FICO score

When you’re applying for credit lenders want to know your credit risk level.

In other words, “If I give this person a loan or extend credit to them, how likely is it that I will get paid back on time?” Your Thrive REALTOR® can explain the whole process, but meanwhile, this primer on credit can get you started.

What is a Credit Report?

Three major credit reporting agencies (Equifax, Experian and TransUnion) in the United States maintain records of your use of credit and other information about you. These records are called credit reports. Lenders will want to check your credit report when you apply for credit.

You can check your own credit report to be sure it contains accurate information. Order your credit reports for free once a year (per federal law) at www.annualcreditreport.com.

Here is a simple, brief overview of what you should know about your Credit Report:

Want to see AND monitor your credit? Checkout these credit monitoring apps below:

Credit Karma

Get it on Apple | Get it on Android

Experian Credit Report

Get it on Apple | Get it on Android

What is a Credit Score?

In most cases, lenders will also want to know your credit score. A credit score is a number that summarizes your credit risk, based on a snapshot of your credit report at a particular point in time. A credit score helps lenders evaluate your credit report and estimate your credit risk.

The most widely used credit scores are FICO® scores, the credit scores created by Fair Isaac Corporation.

What is a FICO Score?

Lenders can buy FICO® scores from all three major credit reporting agencies, and they use FICO® scores to help make billions of credit decisions every year. Fair Isaac develops FICO® scores based solely on information in consumer credit reports maintained at the credit reporting agencies.

Your credit score influences the credit that’s available to you and the terms (interest rate, etc.) that lenders offer you. It’s a vital part of your credit health.

Understanding your FICO® score can help you manage your credit health. By knowing how your credit risk is evaluated, you can take actions that may lower your credit risk — and thus raise your credit score — over time. A better FICO® score means better financial options for you.

Learn More About Credit Before Buying a Home