It is a sad fact in life, no matter how hard we try not to become just another number or statistic, employers, insurance companies, and creditors do just that on a daily basis. Our entire lives, in terms of liability when it comes to these instances, have everything to do with numbers and little to do with personality. These numbers are called your credit score. Your credit score is determined by a formula used to calculate, translate, and evaluate your personal credit history and worthiness, into one three-digit number. That is right, whenever you apply for any type of credit, rather it be insurance, credit cards, mortgages, or even a job, these people are looking at this number to determine if you are worth the risk.

The credit score is simply a shortened assessment of your credit report. The credit report contains a wide variety of personal information about you and your credit history. For example, any credit that has ever been extended to you is placed upon this report. If you have ever filed bankruptcy, been sued, defaulted on a loan, or even been kicked out of a rental place for non-payment, it is all on your credit report. There are three companies that determine your credit score and these are TransUnion, Equifax, and Experian. When you apply for any type of credit, the lender will seek out your credit report from any one of these companies.

Not only does your credit report have a major bearing on your ability to obtain credit of any type, but it also works to determine how high the rate of interest will be on your loans, mortgages, and credit cards. Even though many people use your credit score to determine your credit worthiness and gain quick approvals on credit requests, it does so with some discrepancies. Credit scores are not fool proof by any means, your score can be determine dependant upon which of the three reporting companies a specific lender uses. For example, your credit score may be different with Experian, than it is with Equifax. There for you may be denied or even forced to pay higher rates of interest because of the bureau they choose to receive a report from.

Furthermore, your particular score may be risky as the result of errors on their credit report. According to studies conducted, it is estimated that around 20% of credit reports contain some errors on them, which creates a lower or riskier credit score. In efforts to fix this, the government has begun making it a requirement that each of the credit reporting agencies provide consumers with one free copy of their credit report each and every year. This means that on a yearly basis, you can get a copy of your personal credit report, free of charge, to investigate for discrepancies, errors, or even identity theft instances.