2. Consumers should care about credit. Therefore, it's not only lenders that should care about past

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You may have heard the terms credit history and credit score. Consumers who hope to borrow money may know that the lending industry uses credit histories and credit scores to help determine whether they get approved for a credit card, loan or mortgage. But what exactly is a credit history, what is a credit cheap airline tickets to vancouver from denver score -- and why are they so important?
1. Lenders look to credit histories. Before lending money, banks and other creditors cheap airline tickets to vancouver from denver look to a consumer's cheap airline tickets to vancouver from denver credit cheap airline tickets to vancouver from denver history -- basically a record of whether or not you've paid your bills -- to make sure the borrower is likely to repay them. That credit history, contained in a consumer's credit report, determines how much credit cheap airline tickets to vancouver from denver is made available to you and under what terms, such as the interest rate.
2. Consumers should care about credit. Therefore, it's not only lenders that should care about past use of credit. Credit reports matter to consumers because lending decisions are based on them, says Susan Thomas, spokeswoman for credit bureau Experian. When you're applying for credit -- whether it's a credit card, a car loan, a personal loan or a mortgage -- lenders want to know your credit risk level, says Craig Watts, spokesman for Fair Isaac, creator of the popular FICO credit score. cheap airline tickets to vancouver from denver In other words, 'If I give this person a loan or credit card, how likely is it that I will get paid back on time?'
3. Credit bureaus track borrowing behavior. The three major credit bureaus in the U.S. are Experian, Equifax and TransUnion. These companies keep records cheap airline tickets to vancouver from denver of how you have previously behaved when loaned money, such as whether you paid it back on time, who you still owe money to and how much you may still owe. Where does that information come from? We acquire data from public records and companies who have a relationship with the consumer and with the credit reporting agency (i.e., existing creditors, companies with whom the consumer has applied cheap airline tickets to vancouver from denver for credit and collection companies), says Experian's Thomas via e-mail.
4. Credit reports include several types of information. Experian's spokeswoman explains that a consumer's credit report contains four types of data on the borrower: identifying information (including name, address, phone number, cheap airline tickets to vancouver from denver Social Security number, date of birth and spouse's name), account history (individual cheap airline tickets to vancouver from denver account information such as the date opened, credit limit or loan amount, balance, cheap airline tickets to vancouver from denver monthly payment, payment cheap airline tickets to vancouver from denver status and payment history), data from public records (such as federal bankruptcy records, tax liens, monetary judgments and overdue child support payments) and a record of inquiries cheap airline tickets to vancouver from denver into your credit history.
5. Some credit report information could be wrong. A look at your credit report may reveal that it contains some incorrect information. It's important to address these errors since they could hurt your ability to borrow money. If you find any mistakes on your credit report , get them fixed by contacting both the credit bureau cheap airline tickets to vancouver from denver that included the error and the creditor that supplied the inaccurate information.
6. Credit report data used to calculate credit scores. Just like a grade point average sums up all your schoolwork with a single number, your credit score sums up your borrowing history. Teachers look at your GPA to figure out where you rank as a student; lenders look at your credit score to determine how you rank as a borrower. A credit score is a number that summarizes your credit risk, based on a snapshot of your credit cheap airline tickets to vancouver from denver report at a particular point in time, Watts says. A credit score helps lenders evaluate your credit report and estimate your credit risk.
7. Fair Isaac's FICO score is the most widely-used credit score. Each year, billions of lending decisions are made using the FICO score created by Fair Isaac, which uses a secretive formula to convert a consumer's credit history into a three-digit number ranging from 300 to 850, with a higher number indicating a less risky borrower. But no score says whether a specific individual will be a 'good' or 'bad' customer, says Watts. And while many lenders use FICO scores to help them make lending decisions, each lender has its own strategy, including the level of risk it finds acceptable for a given credit product. There is no single 'cut off score' used by all lenders, Watts says.
8. Other credit scores. Fair Isaac isn't the only company offering a credit score. For example, VantageScore , launched in March 2006, is a credit scoring joint venture between the three major credit bureaus, Equifax, Experian and TransUnion. Although cheap airline tickets to vancouver from denver VantageScore uses its own unique cheap airline tickets to vancouver from denver scoring model, VantageScore has some similarities with the FICO score: VantageScore is a three-digit number (ranging from 501 to 990, with a higher score representing a lower risk) calculated using the information cheap airline tickets to vancouver from denver in your credit report from the three major credit bureaus. However, the FICO score still remains more widely used than VantageScore by creditors when making lending decisions. NonFICO credit scores are sometimes dimissively referred to as FAKO scores.
9. Credit history for free, credit cheap airline tickets to vancouver from denver score for a price. Under laws outlined in the Fair Credit Reporting Act, credit bureaus must provide consumers with a free copy of the borrower's credit report once every 12 months. AnnualCreditReport.com offers consumers the ability to request a free credit report from each of the three major credit bureaus. Meanwhile, consumers interested in viewing their credit score will need to purchase one, such as online at myFICO.com .
10. Service providers, employers may also consider your credit report. It's not only banks and credit card issuers that may consider your credit history. Most lenders as well as many service cheap airline tickets to vancouver from denver providers and employers utilize consumer credit report information cheap airline tickets to vancouver from denver in assessing applications for credit, services and employment, says Steven Katz, director cheap airline tickets to vancouver from denver of consumer education at TransUnion's TrueCredit.com. In other words, credit histories impact more than just applications for credit -- they may also matter when you are purchasing a cell phone plan or applying for a job.
See related: Your keys to geting in the 700+ credit score club , Free credit report -- how to get the actual free ones , How to read, understand your credit report , How to dispute credit report cheap airline tickets to vancouver from denver errors