Your relationship with Credit Bureaus

Sun, Aug 26, 2012

Bankruptcy, Debt Mitigation

Almost all of us have a relationship with the credit bureau. About the only people who do not are those that live entirely on cash and do not have any loans or credit cards.

The credit bureaus begin collecting information on you from the time you start your credit history. This might be when you get your first car or your first credit card. You have to build up this history over time and it is definitely needs special care. The credit bureaus provide your credit score to lenders and that is a big part of why a lender will lend money to you. It also helps determine the interest rates at which you will get loans and credit cards. (Some lenders might not pull a score, but many will.)

Credit bureaus are basically assessing what type of risk you are. A low credit score makes you high risk. It might be low due to paying loans late (or not at all), bankruptcies, too much debt, or judgments. The higher the risk, the worse the terms are. The lower the risk, the better your terms will be.

There are a couple of types of credit score, but the typical score that lenders will probably use is your FICO score. The FICO score is provided by the Fair Isaac Corporation. This is the legal name of the company, but they have decided to start branding themselves as FICO (2009 press release is here).  On their website they talk about the score as well as how to improve it. Some tips about fixing errors are there too, as is definitions about other various things affecting your credit.

SmithLaw feels it is important that everyone be aware of the importance of your credit score. It is something that lives with you your entire life and can be affected by debts and bankruptcies–key areas of our practice.

Image: Some rights reserved by matthiasschack

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