Understanding Credit Scoring

A credit score is a number that helps creditors decide whether to grant credit. It's in your best interest to understand where your credit score comes from. You can improve your score if you improve your credit management.

In this section you'll learn about the factors that influence credit scores, and how credit scores are calculated. An example is given for calculating a credit score. You'll also learn how to maintain and improve your credit score.

When you manage your credit responsibly, your credit score goes up over time. A strong credit history will give you a strong credit score.

What Is Credit Scoring? - Credit scoring is a statistically based computerized method for predicting how likely it is that a borrower will pay back a loan before it's even issued.
Factors in Credit Scoring - Different types of information, known as factors, are gathered from your credit report to make up your credit score. These factors fall into broad categories, such as payment history and outstanding debt.
Your Credit Is Scored - Five sample factors for calculating credit scores are listed below, along with a sample of the importance each factor has to the total score. As you read through the list, think about how your credit might score today.
Improving Credit Scores - Raising your credit score, like improving your credit history, takes time and responsible credit behavior. Creditors look for stability in your credit history.



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Ginnie Mae


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