Credit Bureau Information

Credit Report Basics

Good credit is essential in today’s world to secure most types of loans. Although there is no credit check necessary for Federal Direct Stafford Loans, the Federal Direct PLUS loan does require a credit check, as do private alternative loans such as the Residency Search loans many M4’s use. Your student loans are reported to the three national credit agencies; if you are late in filing a deferment form or late in making a payment, your delinquency will be reported. For this reason it is important for students to know their credit rating. Identify theft is also a major concern and checking your credit report is one of the best ways to be certain that you are the only one using your credit!

Obtaining a Credit Report

Consumers have the opportunity to receive free credit reports once a year from the Annual Credit Report Request Service. This is the only centralized credit reporting service authorized by Equifax, Experian and TransUnion to provide free credit reports. Don’t confuse this program with the many paidservices available to consumers to monitor your credit, or the now antiquated services that provide you with credit reports from all three agencies at one “low price.” You can get one free report from each of the above credit reporting agencies each year so it is a good idea to spread your requests out through the year. This free report will not give you your credit score (FICO score) but it will give you information about all active and closed accounts that show on your credit records as well as any negative items, such as past due payments, loan defaults etc. that are used in determining your credit score. (See FICO Fundamentals below)

You can go online to request, view, and print your free credit reports: 

The three major companies involved in credit reporting. If you find an error on your credit report, you should immediately contact the appropriate agency directly.

Trans Union

FICO Fundamentals

(from The Money Book for the Young, Fabulous, & Broke by Suze Ormzan © 2005)

“A FICO score is a three-digit number that determines the interest rate you will pay on your credit cards, car loan, and home mortgage, as well as whether you will be able to get a cell phone or have your application for a rental apartment accepted. FICO stands for Fair Isaac Corporation, the firm that created the formula that seems to lord over your financial life. The way the business world sees it, your FICO score is a great tool to size up how good you will be at handling a new loan or credit card, or whether you’re a solid citizen to rent an apartment to. A high FICO score gives you a great reputation with the business world; you’ll get the best deals. A lower FICO score translates into paying higher interest rates on cards and loans. Your credit history can even affect your auto insurance premiums or your ability to get that job you applied for. I wasn’t kidding when I said it was connected to just about every part of your life.”

Your.... Accounts for this percent of your FICO score
Record of paying bills on time 35
Total balance on your credit cards and other loans compared to your credit limit 30
Length of credit history 15
New accounts and recent applications for credit 10
Mix of credit cards and loans 10

Fair Isaac uses a formula to come up with a score for you that can range from 300 to 850. Anything between 300 and 500 means you are a toxic financial risk and you are going to be hard-pressed to find any business that will want to work with you. Scores between 500 and 850 are sliced and diced to fall into six ranges; the exact cutoffs for those ranges can vary from lender to lender, but typically this is what you may encounter.

The FICO Ranges
720-850 Best
500-559 Worst

The range your score falls into ultimately determines the interest rate that you will pay on loans. Other factors, such as your employment history and salary, will affect the deal you get, but your FICO score is a major component in determining the interest rate you will end up paying for a home mortgage or car loan.

Other Credit Resources