Transunion Credit Score - Why is it important?

Here's what you need to know about your Transunion credit score

The Transunion credit score comes from one of the three major credit reporting agencies, Transunion. The credit score that you receive has a great impact on whether or not lenders are willing to lend to you. If you're unfamiliar with the credit score and what is involved in determining what yours actually is, then you might want to read on for more information.

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You may be wondering why the Transunion credit score is important. One of the main reasons why it is important is because it gives creditors an idea of how creditworthy you are. In other words, it tells them how likely you are to pay them back if they borrow money to you.

If you don't have the cash on hand to pay for expensive purchases, then you have to borrow the money from lenders in order to pay for the items that you desire. Things such as homes, vehicles, and other expensive items are all things that you will most likely have to borrow money for in order to purchase. There might also be business related items that you need to borrow money for in order to purchase. Whatever the case may be, you're not going to get approved for the loan unless you have a good credit score.

Transunion Credit Score:

It's possible that you might not have a credit score at all. This would be the case if you have never borrowed for a purchase before. In this situation you will most likely have to have someone who has a good credit history sign for you. This will at least help you begin to develop your own credit history.

There are quite a few factors that are used to determine your Transunion credit score. They include payment history, amount owed, age of credit history, new accounts, and types of credit.

Your payment history carries the most weight when it comes to credit score. Whether you make payments on time, how long your account is past due, any type of judgments that you have, collections, and others all affect your payment history.

Another major contributing factor to the credit score is the amounts that are owed on your current debts. The more debt you have, the less likely you are to get approved for a loan. Paying your balances down helps improve your credit score. High revolving debt accounts have the greatest (or worst) affect on your credit score.

The age of credit accounts is also taken into account when determining your credit score. Having open accounts for a long time with a minimal balance typically will help increase your credit score. Having a high balance on the same account will not improve your credit score.

Having too many new accounts can have a negative affect on your credit score. Also, having a high amount of credit inquiries can lower your credit score by as much as five points per inquiry. An inquiry occurs any time a lender, employer, or whoever checks your credit score.

Your Transunion credit score might also be negatively affected by collections activity or judgments against your for things such as child support, criminal payment responsibilities, or other financial obligations that you face.

You can find out all the details of your credit rankings by accessing your Transunion, Equifax, and Experian credit scores online absolutely free. Checking your own scores will not lower your credit rating.