All things credit: Understanding your credit report, score, and more

Credit health is crucial in empowering consumers to make the most important purchases on terms favorable to them.

Credit will be a factor in most major purchases people make. Those with strong credit get the most competitive interest rates available, in turn saving a lot of money. As a lender, Lyons Mortgage is intimately familiar with the impact of the applicants’ credit situation.

What comprises a credit score? What is on a credit report? How do I dispute reported credit inaccuracies?

Despite its’ importance, aspects of credit are often misunderstood by consumers. Understanding some of these questions will allow you to build and preserve healthy credit. This article will discuss the factors that make up your credit score, what is on a credit report, and some tips on how to maintain good credit standing.

Credit scores

This is the ubiquitous 3-digit number used by the three major credit repositories: Experion, Equifax, TransUnion. This number reflects the consumers’ overall credit risk and the probability of repayment profile. Ranging between 300-850, those with scores of 740 and above receive better interest rates. Those with a track record of timely repayment pay the least for what they borrow.

The most influential factor impacting credit scores is the number of late payments and overall payment history.

If you take away one thing from this article let it be this! According to Equifax, payment history makes up 35% of a credit score. Other factors include total debt, outstanding balances of revolving and installment credit, and credit history length.

These factors are outlined more thoroughly in the credit report.

The credit report goes into detail about account history, any late payments, delinquencies, and the number of credit inquiries. Consumers are entitled to one free credit report a year: you can get one here. If you notice inaccuracies on your credit report, it is within your rights to freeze your credit account and dispute specific items. According to federal law, if you dispute any accounts the repository company(s) must investigate the dispute and come up with a resolution within 30 days.

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