How Credit Score Works - An Overview

A credit score is not an easy thing to understand or calculate. There are many credit score formulas that a lender can use, but the most common and the one we will focus on is called FICO.

A credit score is a point in time snapshot of your credit profile and it is constantly changing. As new information is being added, old information is being removed from your credit report. This is very good news if you are trying to improve your credit score, but it also can be a challenge if you are trying to keep your existing good credit score.

One thing to remember is that it is much easier to bring your credit score down than it is to bring it up. For this reason, you can not rest once you manage to correct your credit score. You need to continually monitor and actively control your credit score.

There is no shortage of companies that offer to monitor your credit score and you might be already working with one of them. However, what we recommend is going right to the source. Fair Isaac Corporation the creator of the FICO scoring system partnered with Equifax, Inc. one of the major credit reporting agencies to help consumers manage, monitor and improve their credit scores. This partnership is called MyFico and it offers a service called FICO® Quarterly Monitoring; we strongly recommend you consider it.