BVS Performance Solutions FinancialGuru - Credit Scoring Description: Opening slide of a series of credit scores replaced by the title of the video, Credit Scoring. Narrator: There are a lot of people who aren't sure how to check their credit score or what to do if they find themselves with credit problems. Description: Image of man shrugging his shoulders. Narrator: Some people don't even know what a credit score really is, so let's go over the basics. Narrator: Your credit score, also known as your FICO score, is a number between 300 and 850. Description: Image of one person handing another three $50-dollar bills. Narrator: In general, it shows how responsibly you've handled borrowed money, also known as credit. Description: Image of the word "Credit" and below a number of credit cards and beside that a house. Narrator: Credit covers everything from credit cards to home mortgage loans. Description: A map of the United States with a credit bureau in the center sending information to banks located across the map. The bank is then replaced with an image of a calculator. Narrator: The scores are calculated by companies called "credit bureaus." Narrator: These companies are sent information by lenders across the country, which they use to make credit reports and calculate credit scores. Description: Image of a banker working at her desk. Narrator: As for what makes up a credit score, well, it's actually based on five different things. Narrator: From the top in order of importance they are-- your payment history, how well you do when it comes to paying back money; the amount of money you currently owe on any loans, credit cards, or other debts; the length of your credit history, how long you've been borrowing and repaying money; new credit, any recent loans or credit accounts you've opened; and the types of credit you've used in the past, which shows how much experience you have using credit. Description: A pie chart representing numbers related to the above information. The numbers disappear and are replaced with the number 690, which represents a credit score. Narrator: Each of these areas gets a number that takes into account your record and the importance of the credit category. Narrator: Add those five numbers up and you have your credit score. Narrator: For most people, that score ranges from about 650 to 800. Narrator: A score on the low end of that will generally result in higher interest rates. Narrator: And people with the best scores, those above 770, are the ones who generally get the best or lowest interest rates. Narrator: In order to have a good score, then you should be aiming for at least 700. Description: Image of large question mark which is then replaced by an image of two women discussing financial matters at a desk. This image is then replaced by montage of images including: a stack of credit cards, an apartment building and a job application. Narrator: So that's what a credit score is, but why is it so important? Narrator: Well, any time you apply for a loan or credit card, even if you apply for an apartment or a job, someone may be looking at your credit score. Description: Image of a magnifying glass with the number 690 in view. Narrator: So, it not only factors into their decision, but it also usually affects your interest rate. Narrator: In other words, it's a pretty big deal.