Is it your first time to apply for a cash loan Taylorsville? There are two things you should know: credit score and credit report.
Although both terms are interrelated and important, they are not the same. To make your first loan experience as breezy and pleasant as possible, Utah Money Center says you should be able to tell the difference.
What Is a Credit Report?
A credit report is the one issued by any of the three bureaus in the United States: Experian, TransUnion, and Equifax. It is composed of a few pages that display your account information, credit summary, personal information, disputes filed, some legal notes, inquiries, and negative information.
Although all these sections are essential, two are more important: negative information and inquiries. The first one lists down bankruptcies, tax liens, foreclosures, and other judgments that can potentially hurt your loan application tremendously. Many lenders often avoid applicants with pending liens or bankruptcy records. Sadly, these data can stay on your report for at least 7 years.
Inquiries, on the other hand, refer to any requests for your credit report by lenders. Such request may be voluntary or involuntary. Depending on the number of inquiries and periods they are made, they can affect your credit score.
What Is a Credit Score?
It’s a measure of your credit health and risk. The higher the score, the more likely you’ll enjoy a lower interest, affordable amortization, and favorable payment terms. This is because it implies you’re capable of paying and settle your debts promptly.
Calculating a credit score is complicated and considers many factors. These include the amount owed, new credit, length of credit history, payment history, and credit mix, which are found in your credit report.
How to Get Them
Credit bureaus can issue a free credit report once a year, but not the credit score. FICO, which is the most popular source of credit scores, offers different plans, which may cost as low as $19.95 a month.
Before you apply for any credit, make sure you already have your score and report. This way, you can already assess your chances of being approved, give yourself time to improve your score, and even file for disputes for any wrong information.