free credit score

What is a Free Credit Score?

A free credit score is a mathematical model consisting of numerous variables used to estimate one's credit risk, but with no cost. The most commonly used model is called FICO® (named after its creator, the Fair Isaac Company). Your FICO® credit score is used to evaluate your creditworthiness by giving you a certain amount of points based on the information contained in your credit report and your debt-to-income ratio. Your credit history is very important when concerning your credit score. Many websites now provide free credit score online for the people in need.

Different scoring systems have different numbering systems. These can range from a low of 300 to a high of 900. With FICO, typically, a score of 660 or higher means your credit is considered very good. A score below 620 means that you might have trouble obtaining credit or you might have to pay a higher interest rate. A score above 700 means you have premium credit and can quite easily obtain the financing you need at the lowest available rate.

It should be noted that not every single lender uses the FICO® model; however, the models they use are very similar to it. Also, lenders vary in what is important to them in terms of loan approval. One lender might place more weight on payment history, while another places more weight on outstanding debt.

It isn't just your own payment history and loan mix that plays a part in determining your score -- your particular profile and payment history is compared to millions of others.

The following factors are NOT included in computing your FICO® credit score:

- Demographic variables, such as your age, race, religion, sex, or marital status

- Your salary, profession or employment history (although your salary does determine how much you can borrow)

Taking time to improve your credit score can be literally like paying yourself $300 an hour, if your goal is to improve your credit before you apply for a mortgage loan. In any event, it pays to improve your score as much as possible to enjoy lower interest rates on credit cards and all types of financing. Your FICO® credit score can be purchased for about $13.00 and you can have immediate access to it.