Tuesday, December 30, 2014

Experian Credit Score: How to get your Experian Credit Score

Experian Credit Score: How to get your Experian Credit Score

Experian Credit Score is one of the many scoring models used by businesses in lending money to customers. The Experian credit score is used to evaluate a persons creditworthiness. Your credit score is an indicator of your creditworthiness. The Experian Credit Score is solely based on an Experian Credit Score model and it differs in some ways from other scoring models such as Equifax, TransUnion or FICO scoring model. Although each of these companies use most of the same evaluating parameters such as persons length of credit history, type of credit, revolving account, payment history, etc.

The above stated factors are available in your credit report, lenders and creditors use credit report information to calculate your credit score to get an insight to your creditworthiness. The score evaluation tells them how risky you pose to them , if they do decide to give you credit. The higher credit score you have, the chances of getting good credit at lower interest rate are high. With higher credit score you pose low risk to lenders. Let's first understand what is a Credit Score. 

What is a Experian Credit Score

Now we know why credit score is important and for what purpose it is used by lenders and businesses. The next thing to know is what is the scoring range and at each level of scoring range what it means to a consumer. The credit score range is from 300 to 850 (no-credit to excellent credit).

The Experian Credit Score is based on a proprietary Experian Credit Scoring model and is not the same as scoring model used by other credit bureaus.

This three digit credit number has become an important tool for lenders for credit analysis and for consumers it holds a personal report card. Even though each of three credit company use FICO mathematical scoring model and yet there scores differ from each other. This is due to additional checks and balances are applied to scoring model. You will always see some difference in few points between credit score from three  credit bureaus.

How is Experian Credit Score Calculated

The Experian credit score is calculated based on many factors that provide information on a consumer file. The factors which are used for mathematical calculations are length of credit history, type of credit accounts, Balance on accounts, available credit, payment history, any negative comments on consumer file and how many inquires are there on consumer file. Each of these factors is assigned a numerical value, and then weighted based on how prominently they affect your credit worthiness. More details information on credit score calculation is given below in Credit score table.

How am I responsible for my Credit Score

The credit score you are awarded by credit bureaus is based on your credit actions. How you take credit, how you pay and how you manage your credit. Any of these actions on negative or positive side impact your score and bring your score up or down. You can improve credit score at every level even when you are in good, bad or excellent credit score range. Of course building credit score at low score is multi-step process and time consuming but eventually with meticulous planning you will be able to fix your credit score. Read more on 'How to get your Experian Credit Score' and what factors impact your credit score calculation.

Important Credit Score Questions

Credit Score Questions Credit Score Answers
What is a Credit Score  A numerical three digit number derived from Credit scoring model based on various factors by using credit report of a consumer.  
What is a Credit Score Range  The credit score range of a Credit score is between 300 points to 850 points.
Excellent Credit Score  Credit Score from 720 to 850 - This is the range where everyone's credit score should be to avail low interest loans, good mortgage loan, premium credit cards etc.
Good Credit Score  Credit Sore from 679 to 719 - Although it keeps you out from premium deals but still good to attract lenders for good credit card offers and mortgage loans on reasonable loan rates.
Average Credit Score  Credit Score from 620 to 679 -  It gets harder when you are financing from private lenders, still you may get few deals in this range. Although creditors have designed lending programs for each of the score range and they differ on terms and conditions and the interest they carry.
Bad Credit Score  Credit Score from  up to 579 - If your credit score is below 579, that is not a good news. The financing options become narrow and the ones, which are available come with very high interest rates and penalties. This is the time to religiously look for credit repair help and rebuild your credit score.
No Credit Score  Your consumer file is not opened at credit bureaus. Mostly in the case of children and students.
Experian Credit Bureau
 Experian (formerly TRW)
  • Address: P.O. Box 2104
  • City: Allen, TX 75013-2104
  • Experian Web Address
  • Phone Number: (888) 397-3742

      The Fair Issac company introduced FICO score in the year 1989. FICO score is used by banks, lenders and business for granting loans and credit to consumers.
    Structure of FICO Score
    • Payment History: 35% : This is the major factor, which impacts your credit score. The Payment history covers information related to many factors
      • Good Factors
      • Payment history without any interruption
      • Payments on multiple account
      • Payment types
      • Bad Factors
      • Late payments
      • Defaults
      • Judgments
      • Settlements
      • Liens
      • Bankruptcies
    • Debt on accounts: 30% : This is about how much and what types of debt balance you carry. The type of debt, balance limits, mode of payments and the amount being paid one ach of these account.
    • Length of Credit history: 15% :This is about how long is your credit history, the scoring model also looks at the accounts you have and how old they are.
    • Inquires: 10% This is about the credit request you make with lenders and the decisions you get from lenders. The request you make at lenders for credit and in turn they make inquiry on your credit history or to check your credit score at credit bureaus is considered as hard inquiry and impacts your credit score.
    Credit Scoring Factors
    • Type of credit accounts you have
    • Number of accounts you have
    • Available credit
    • Balance on your credit accounts
    • Length of your credit history
    • length of payment history
    • Note: Each of these factors carry a numerical number based on scoring evaluation and is used and weighted on credit risk index to evaluate consumers creditworthiness.

    How can I check my Experian Credit Score

    The checking your credit score on Experian credit website is easy. You can check individual Experian credit score and credit report on Experian official website by enrolling and paying around $20 a month.  The Experian free credit score and report is only for $1, when you sign up for monthly subscription. The trial period is for seven days and thereafter $21.95 is monthly fee for accessing your credit score and Experian credit report. The online access to Experian also comes with other features such as fraud alert, identity theft protection, credit report monitoring etc. The $1 free option is good when you just want to check your credit report and score and are not interested in continuing to a monthly subscription.

    Please note the price and the product structure explained in this post may change in future, for more latest pricing, products and  how to get your Experian Credit Score, please visit official Experian website.

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