If you are new to credit, the most common way to build your credit score is acquire a loan in the form of a secured credit card.. A secure credit card is a card that you give the bank a asset that they hold to guaranty payment. Perhaps 5 thousand dollars ( the amount of your credit limit ) in a savings account that is available to the bank if you default upon your payments. If you default logically that will have a negative impact upon your credit score. If you make payments on your card as per required your credit score increases. At a certain credit score your security will no longer be required by the bank.
Factor the are use to determine and assign a credit score: Payment history, Amounts owed, Length of credit history, Types of credit, Credit inquiries, Credit scores typically range from 300 to 850. Poor: 300 to 579, Fair: 580 to 669, Good: 670 to 739, Very Good: 740 to 799, Exceptional: 800 to 850.
TransUnion, Equifax, and Experian are the three major credit reporting companies. According to the Fair Credit Reporting Act (FCRA) you are entitle to a free credit report once every year. This credit report might not give you your credit score, it will tell you if you have any negative marks on your report. Some banks and some credit card companies provide scores for free on your statements.
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