It's entirely based on information contained in your report (your age, ethnicity, salary, assets and place of residence don't come into it), and is calculated by computers using highly sophisticated algorithms.These assign negative or positive values to all the entries in your file, weighted according to their recency and significance, and are designed to provide the best possible indicator of your likely ability, readiness and willingness to handle future credit well. In fact, in 2013, the Federal Trade Commission reported that one in four consumers in a study had found errors in their credit reports that were sufficiently serious to materially affect their scores. It's vital that you check your report and score regularly -- at least annually -- for errors.
If you're worried about existing or potential employers accessing your credit score when you apply for a promotion or new job, relax. That's just not true, but you can see why this is a common myth.
If lenders check your report because you've applied to them for new credit, that does have an impact.
According to Vantage Score, one of the companies that devise scoring systems, each such inquiry could decrease your score by 10 or 20 points.
It also shows applications you've made for credit, whether successful or not.
Entries generally remain on your report for seven years, although some sorts of bankruptcy can appear for 10.
That seven-year rule applies to virtually all entries, including -- in spite of another myth -- those concerning accounts you've closed.
A credit score is a three-digit number that presents a snapshot of your overall creditworthiness on a particular day.
If you thought ancient Greece was the home of myths, you should check out modern America.
Certainly when it comes to credit scores, many of us believe stories that would make Homer blush.