Credit Checking

  

When a qualified someone checks your credit score or credit report to find out how much of a credit risk you are.

If you apply for a job, a loan, or an insurance policy, or want to rent a swanky apartment, someone will probably run a credit check on you.

Now start humming the tune from that song "I've got a spell on you..."

Related or Semi-related Video

Finance: What are Credit Scores and Wort...21 Views

00:00

Finance allah shmoop What are credit scores and credit worthiness

00:08

Remember that scene from wayne's world Alice cooper lets him

00:12

backstage They bow and chant Where'd i worthy We're not

00:15

worthy Well basically just swap one of the greatest rock

00:18

and roll singers with your local banker Yeah well as

00:21

much as you'd rather hang out with alice cooper this

00:24

nerdy guy here is wet A more important to your

00:28

credit That long hair thing worked when he was in

00:31

his twenties And not so much now I guess Anyway

00:33

if you have a bank account or a credit card

00:36

or are generally tapped into the banking and credit system

00:39

of the world in any way shape or form you

00:42

have a credit score You might not know it But

00:45

you do Where does that score come from And yeah

00:48

It's known as yours Fico score While fico stands for

00:52

fair isaac corporation that's a publicly traded company and that's

00:56

what they do they provide credit scores and they try

00:59

to be fair like isaac Anyway those scores were requested

01:03

and released through one of the big three credit bureaus

01:06

Equifax experian in trans union Oh my These guys give

01:10

you a number That kind of thing finds your reliability

01:13

in making payments to banks or other lending institutions who

01:17

might loan you dough Well why would you care home

01:20

Because that number you get directly affect the price you

01:24

pay to rent money The worst Your credit score the

01:28

higher your rent have will likely be in who likes

01:31

to pay high rent especially when it comes to renting

01:33

money Well the worst fico score is a zero and

01:36

were wondering what you'd need to have done Teo get

01:39

that like three bankruptcies in a bank robbery Maybe Well

01:43

we want to meet the third guy who loaned you

01:45

money at that point Anyway the bill gates perfect score

01:48

is an eight Fifty on such a show off And

01:50

here are roughly the breakdowns for how banks think of

01:53

credit Score c it's all color coded here with the

01:56

red yellow and green Well the goal here in having

01:59

a score is to determine your reliability in paying back

02:02

a given loan Yes the amount you're borrowing also matters

02:06

But to speed up the initial evaluation of you is

02:09

a borrower Wealthy credit score is applied to you and

02:11

it lets banks quickly come to a yes or no

02:14

or ah maybe decision Yeah quickly that credit score thing

02:17

helps and if the answers and no well then you

02:19

can always backpack across the country and stay in youth

02:22

hostels So yeah you don't want to be murdered by

02:24

a deranged dutch businessman and we suggest you stay current

02:27

on your us visa payments and have a high credit 00:02:30.173 --> [endTime] score Be creditworthy because you are worthy Hope yellow

Up Next

Finance: What is a Line of Credit?
133 Views

What is a line of credit? A line of credit is kind of like a loan. A bank gives a borrower a line of credit, which basically says they can borrow â...

Finance: What is the Credit Rating Agency Reform Act Of 2006?
4 Views

What is the Credit Rating Agency Reform Act Of 2006? As signed by President George W. Bush in 2006, the Credit Rating Agency Reform Act required th...

Finance: What is the Equal Credit Opportunity Act?
6 Views

What is the Equal Credit Opportunity Act? Signed into law during the Nixon-Ford era in 1974, the Equal Credit Opportunity Act is essentially an ant...

Find other enlightening terms in Shmoop Finance Genius Bar(f)