BVS Performance Solutions FinancialGuru - Credit Scoring Description: Opening slide of a desk with the words Credit Scoring appearing over top, as if being entered into a search field. The narrator appears on a white background with the words: "What is a credit score?" 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. Narrator: Some people don't even know what a credit score really is, so let's go over the basics. Description: A gauge with the numbers 300 (poor) to 850 (good) appears beside the narrator. Narrator: Your credit score, also known as your FICO score, is a number between 300 and 850. Narrator: In general, it shows how responsibly you've handled borrowing money, also known as credit. Description: An image of the word "Credit" appears beside the narrator, and below images of a credit card and beside that a house. Narrator: Credit covers everything from credit cards to home mortgage loans. Description: The narrator is replaced by the image of an office building and the words: "Credit Bureaus". Underneath this is the sentence: "Lenders across the country provide information to make credit reports and calculate credit scores." 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: The narrator returns to the screen, and as he lists off the numbered list below the numbers one to five appear on screen. 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-- 1. your payment history, how well you do when it comes to paying back money; 2. the amount of money you currently owe on any loans, credit cards, or other debts; 3. the length of your credit history, how long you've been borrowing and repaying money; 4. new credit, any recent loans or credit accounts you've opened; and 5. 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 fades in. The chart disappears and is replaced with an example of a common range of credit scores, from 650 to 800. 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. Description: The chart disappears and is replaced with an example of a common range of credit scores, from 650 to 800. 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: The narrator returns to the screen. 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, and even if you apply for an apartment or a job, someone may be looking at your credit score. 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.