How to Read & Interpret TransUnion Credit Ratings

TransUnion is one of the three major credit bureaus--along with Equifax and Experian-- that reports your credit and gives you a credit score (also known as FICO score) that helps potential creditors, including credit card issuers and mortgage lenders, determine your creditworthiness and how likely you are to pay back your loans. Not only does your credit score influences creditors to approve or deny your loan application, but it also determines the interest rates they charge your for the loan. Monitoring your credit report and knowing your credit score is important for your financial well being.

Instructions

1

View your TransUnion credit report and rating. Look at the financial institutions that appear on your credit report and ensure that you indeed have a credit card or loan issued through them. Look at the standing rating each financial institution has reported to TransUnion about your payment history. This generally reads as OK, which indicates that you are paying your loan on time as agreed, or not,which indicates late or missed loan payments.

2

Check your credit score. You credit score is a number that can range between 300 and 850. TransUnion uses a formula that calculates your credit score based on information on your credit report, including loan payment history, amount you owe, the length of your credit history, the amount of new credit you have applied for recently and the types of credit you have. The higher your credit score, the more likely you are to receive the loan you are applying for and the lower the interest rates the creditor will charge you. And although no set standards exist as to the numbers that make a good score or a bad score, generally a credit score that is above 660 is viewed as favorable and one that is lower than 600 signals higher risk to creditors.

3

Read any explanations TransUnion has noted on your credit report. Generally, TransUnion may add notes to explain factors that influenced your credit score. Have you applied for too much credit recently? Did you default on paying one of your loans? Have the balances on your credit cards reached their upper limits reducing the credit available to you? All these factors lower your credit score.