Faqs

What is a credit score?
A credit score is a numerical rating that attempts to measure a borrower’s creditworthiness. The score indicates the borrower’s general payment behaviors—summarizing how often the person pays their bills and obligations on time. A high credit score does not guarantee that a loan applicant will never default on a mortgage; however, that person represents a statistically smaller risk to a lender than a person with a low score. Lenders and creditors, therefore, are more likely to approve loans and offer their most-favorable terms to people with the highest scores.

What is a good score?
Generally, the higher the score the better. EQ scores range from 280-850. The lower the person’s score, the higher the credit risk (or bill paying risk) they are assigned. The answer to “what is a good score?” is: “It depends.”While no industry standard exists for making decisions based on scores, and most creditors and lenders would be wise to evaluate other factors including a person’s score, most companies would look favorably on a score in the 700s or above.
Yet, for some situations, a score of 630 would be considered good, given other financial strength factors are also good.In general, a lower credit score will cause a person’s cost of living to increase.Low scores, in the 500’s and lower, can cause insurance costs to increase and cause utility costs to be higher.So, bottom-line, monitor your score, and make bill payments on time to improve your score.

What factors go into the credit-score formula?
A score is derived in part from a consumer’s payment history. That is, do you pay credit cards, mortgage, and car-loan payments on time, and is your history free from ‘past-due’ amounts, bankruptcies, foreclosures, wage attachments, liens, etc.? As you might imagine, the more recent and larger a negative item, the farther it drags your score down. Also, the more instances you have of a problem, the lower goes your score.

Who calculates credit scores?
When a lender or a credit grantor requests your score, it is calculated by a computer at the lender's location, by a third-party service provider such as a mortgage reporting agency, or may be applied at a consumer reporting agency. The score is one of many pieces of information the lender and creditor may use in evaluating your credit application. Community Empower uses a sophisticated method to calculate your score to most closely match your true mid-score.The mid score is the ‘middle’ score of the three reports a lender will often retrieve when you apply for a home loan.

What if I don't I have a credit score?
Credit scoring models cannot generate a score unless there is sufficient credit information. If you have little or no credit history, you will probably not have a credit score available. If you have never had a credit account, try applying for a retail, gas or secured credit card to begin your credit history. Some banks offer a secured debit card or “check card” with their checking accounts that can migrate to a credit card with 6 months of current payment usage. If you keep your outstanding debt low and pay your bills on time, before long you'll receive additional offers for credit. However, you may want to be cautious and only apply for credit that you really need.

How often do credit scores change?
Your credit score is a fluid number that changes as your credit report changes. Therefore, any change to your credit report due to a reported financial transaction could impact your score, almost on a daily basis for some people. When you enroll in Community Empower for a period of longer than 1 month, you will get a new analysis and score calculation once every 30 days.

Do late payments affect a credit score?
Absolutely. Paying bills on time is generally the single most important contributor to a good credit score. Being late on any bill, for any length of time, is a possible indication of future non-payment of debt and is almost always viewed negatively by lenders. Any late payments will remain on your credit report for up to seven years.