Lenders evaluate your credit worthiness when you are applying for credit utilizing what is known as a credit bureau. Essentially, a credit bureau is a file that provides a snapshot of one's credit standing, listing both past and outstanding financial obligations. This information is arranged in a manner that conveys to a lender how a credit candidate has met his or her financial obligations in the past and what obligations remain in the future. Lenders such as automotive, mortgage, and credit card companies use this information as a decision tool when making lending decisions. Obviously, those individuals who have met past obligations in a timely manner and that have a proven track record of repaying debts stand a better chance of being extended credit.

Is there more than one credit bureau?

Several major credit bureau services exist and are extensively used throughout the United States, but each service basically works in the same fashion and coveys the same information.

What does my credit score mean?

Often a credit bureau has a score associated with it which is used by a lender to quickly categorize various credit candidates in to different classifications bases on perceived risk. The score is derived from a formula that utilizes the information provided within a credit bureau. The score is inversely related to the risk a credit candidate poses to a lender in terms of repayment. Simply put, the higher the score the better. Credit scores which are commonly referred to as beacon scores have a top end of approximately 800 with most individuals falling in the 500 to 700 range.

What does it mean to have “A,” “B,” or “C” credit?

At some point you may have heard your credit or someone else's referred to using the alphabet or more specifically A, B, C, or D credit. These classifications are generally related to one's credit score and are another way that lenders group and categorize potential credit candidates. The following credit score ranges are commonly used and accepted by most lenders when rating one's credit worthiness.

Credit Score Rating

700 Plus A

699-670 B

669-640 C

639 and below D

Is it possible to improve my credit?

It is important to understand that your credit file is not a fixed or static record, but rather a dynamic and continually evolving representation of one's credit picture. It is entirely possible to improve your credit, and, in fact, this is a service that Swapalease.com offers. Click Here.

Do I need perfect credit to get approved for a loan or lease?

It is important to note that just because one does not have a high credit score or an "A" credit rating, it is still possible to obtain credit. It just means that if they are extended credit, it will more than likely cost them more in terms of interest than an individual who scores higher due to the lender's perceived risk. Also, be aware that your debt to income ratio, professional status, and length of employment are not part of the credit score equation; however, these factors are taken in to account by lenders when making credit decisions.