Credit report

Inside Your Credit Report and How You Can Improve Your Credit Score

Credit has become such a big part of our lives, from to buy a house or car to obtain health insurance and undergo employment background checks. It is undeniable that credit is important. Here’s why.

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How your credit score is calculated

There are standard credit scoring models that analyze one of your consumer credit reports and then assign a score (often ranging from 300 to 850) using complex calculations. FICO and VantageScore are the two main consumer credit scoring models.

When your credit scores are calculated, several factors are looked at and each factor has a certain weight.

Your score may also vary depending on the type of credit score and credit report of the three national credit bureaus is used to calculate the scores.

Payment history, credit history, your credit mix (i.e. the different types of credit you have), amounts owed, and new credit are the factors reviewed as part of the system. FICO rating.

Good score, bad score

For a score between 300 and 850, a credit score of 700 or higher is considered good. If you have a score of 800 or more on the same range, it would be considered excellent.

Black Americans generally have lower credit scores than other racial groups. About 54% of black Americans report having no credit or a poor to fair credit score, according to a recent survey of 5,000 American adults by Credit Sesame. Compare that to 37% of white Americans who report having bad credit or no credit.

“While the credit system was created to be blind, this data shows that Black and Hispanic Americans are being unfairly excluded from the system,” Jay Moon, chief credit officer at Credit Sesame, said in a statement.

High student debt among blacks plays a role in lower credit scores.

To learn more about how to improve your credit score, Click here.