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The Essential Guide to Credit Reporting

While you may not realize it, your credit report says an awful lot about your spending habits. But what exactly is a credit score and how is it calculated?

Your Credit Report

A credit report is a document that contains all your credit-related information, including your credit score. Calculated by a formula that creditors use to predict your “risk” factor, your credit score is what creditors use to see whether or not you should be approved for a particular loan.

While there are many different types of credit scores, the primary score developed by Fair, Isaac and Company is referred to as your FICO score and is the most common.

How Your FICO Score Is Calculated

Your FICO score is broken down into five parts. While each part has an impact on your overall score, you’ll see that some are more important than others:

  • Payment history (35%)
  • Outstanding debts (30%)
  • Credit history (15%)
  • New credit (10%)
  • Credit in use (10%)

How to Analyze Your Credit Score

While your credit report may seem like an alien language, the most important thing to note is your score. FICO scores are calculated on a wide spectrum – the higher your FICO score, the better your credit.

  •  Scores below 539 = very poor credit
  •  540 to 589 = poor credit
  •  590 to 669 = fair credit
  •  670 to 729 = good credit
  •  Scores over 730 = very good credit

Who Can Access Your Report?

Not just anyone can access your report. In fact, in most cases you’ll need to allow someone permission to view your credit.

In the United States, the federal government regulates credit reporting through The Fair Credit Reporting Act (FCRA) of 1970. This act allows credit reporting agencies to only pull a credit report…

  • In response to a court order
  • At your request
  • At the request of a child support enforcement agency
  • Or by a company or individual who is using it for:
    • a credit transaction
    • employment purposes
    • insurance underwriting
    • determining eligibility for license from government (i.e. driver’s license)
    • determining eligibility for loan
    • a legitimate business need

Who Are the Credit Reporting Agencies?

There are three major credit reporting agencies that are used to pull someone’s credit: Equifax, Experian, and TransUnion. Because creditors sometimes report your credit transactions at only one credit reporting bureau and not the others, the credit information at each credit reporting bureau may vary. Though the credit reports may differ, each calculates your credit score to determine your credit worthiness.

Now that you know how to calculate your credit score, you can start taking the steps necessary to better manage it. Whatever your credit history, CreditGuard of America, Inc. is here to help. Contact us online or call us at 1-800-500-6489 to learn more about how to build and maintain a stronger credit score.

Also See…

For more information on credit reports, please visit:

Credit Scoring Factors

Improving Your Credit

Building Your Credit

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