In a prior blog I discussed how to obtain your credit record. Today I would like to help you understand what a credit score is and how it affects your credit. Creditors use credit scoring to help determine whether they should give you credit and how much to charge for it.

The following information is gathered from your credit report:

• a list of all of your accounts with an indication of what type they are
• a record of any of your late payments
• a record of any collection actions against you
• a record of your outstanding debt
• the age of each of your accounts
• your history of bill payment

Your creditors then use a statistical formula to compare this information to the credit performance of other consumers with a similar profile. They use a credit scoring system to award points for each factor. Your credit score is the total number of these points. This score helps predict whether or not you are a credit risk, i.e. how likely you are to repay a loan and make payments on time. Usually, if you are a good credit risk you have a high credit score. As I mentioned in the previous blog, you can get you credit score from the three nationwide consumer reporting companies.

I hope this information was helpful to you. If you live in Denver, Aurora, Arvada, Brighton, Broomfield, Commerce City, Englewood, Highlands Ranch, Lakewood, Lafayette, Littleton, Northglenn, Westminster, Wheat Ridge, or Golden, Colorado, please feel free to contact me. Kevin D. Heupel, Colorado bankruptcy attorney, 303-955-7570, Colorado Bankruptcy Help Email, personal bankruptcy free-consultation form .