What Your Transunion Credit Score Is Used For

Your Transunion credit score is used to help lenders determine whether or not to give you a loan.

Checkout this video:

Understanding Your Transunion Score

Your Transunion credit score is important because it is one of the three main credit scores that lenders look at when considering you for a loan. A high Transunion score means you’re a low-risk borrower, which could lead to a lower interest rate on a loan. A low score could lead to a higher interest rate and could mean you won’t be approved for a loan at all.

What is a Transunion Score?

A Transunion score is a credit score that is used by lenders to help decide whether or not to extend credit to an individual. This score is one of the three major credit scores, along with the Experian and Equifax scores. The Transunion score ranges from 300 to 850, with a higher score indicating less risk to the lender. Lenders may use all three of the major credit scores when considering an individual for credit, or they may choose to focus on just one or two of the scores.

What is a FICO Score?

FICO® Scores are the most widely used credit scores, and lenders use them as a guide to help them decide whether or not to lend you money. They’re also used to determine the interest rate you’ll pay on a loan. A higher score means you’re a lower risk, which could lead to a lower interest rate.

There are many different credit scoring models out there, but the FICO® Score is by far the most popular. That’s because it’s used in more than 90% of lending decisions in the U.S.

Your FICO® Score is calculated based on information in your credit report, and it can range from 300 to 850. The higher your score, the better your credit looks to potential lenders. And the better your credit looks, the more likely you are to qualify for a loan with favorable terms – like a lower interest rate.

What’s the Difference Between the Two?

There are a few key ways that your Transunion credit score and your Transunion FICO® score differ:

1. The Transunion credit score is a numerical representation of your creditworthiness, while the Transunion FICO® score is a letter grade ranging from “A” to “F”.

2. The Transunion credit score ranges from 300 to 850, while the Transunion FICO® score only goes up to 850.

3. The Transunion credit score is based on information in your TransUnion credit report, while the Transunion FICO® score also considers other factors, such as your payment history and outstanding debt.

How Your Transunion Score Is Used

Your Transunion credit score is important because it is used by potential lenders to make decisions about whether or not to lend to you. A high score indicates that you are a low-risk borrower, which means you are more likely to be approved for a loan. A low score, on the other hand, could result in your loan application being denied.

Lenders

Your Transunion credit score is one factor that lenders may consider when you apply for a credit card, an auto loan, a mortgage or other types of financing. A higher score may give you a better chance of getting the financing you want at a lower interest rate.

Other factors that lenders may consider include your income, employment history and other debts you may have.

Insurance Companies

TransUnion is one of the three major credit bureaus in the United States, and your TransUnion score plays a role in everything from whether or not you’re approved for a credit card to how much you pay for car insurance. Insurance companies pull your TransUnion score (as well as your scores from Equifax and Experian) when you’re applying for a policy, and they use it to help determine your premium.

A better TransUnion score can mean a lower premium, so it’s worth checking your score before you apply for a policy. You can get your Transunion credit score for free on Credit Karma.

Employers

pull
While your Transunion score is not a factor that employers pull when they’re looking at your credit report, it is something that could come into play if the job you’re applying for is in the financial industry. If you’re applying for a job that will involve handling money, your potential employer may want to see not only your credit report, but also your credit score. This is because people with high Transunion scores tend to be more responsible with money and are less likely to commit financial crimes.

While your score won’t necessarily keep you from getting a job, it is something that could come into play during the hiring process, especially if you’re applying for a position in the financial industry.

How to Improve Your Transunion Score

Your Transunion credit score is used to lenders to help them assess the risk of lending you money. A high score means you’re a low-risk borrower, which could lead to a lower interest rate on a loan. A low score could lead to a higher interest rate and could mean you won’t be approved for a loan at all. So, it’s in your best interest to have a high Transunion score. Here are a few ways to improve your score.

Check for and correct errors on your credit report

TransUnion is a consumer reporting agency that provides information about you to creditors, businesses and others for the purpose of credit granting, fraud prevention, risk reduction and other legitimate uses. You have the right to know what is in your Transunion credit report, and you may request a free copy of your report once every 12 months. You can also request a free report if you are denied credit based on information in your Transunion report.

If you find errors on your Transunion credit report, you can file a dispute with Transunion online or by mail. You should also contact the creditor or business that provided the incorrect information to Transunion. If you correct an error on your Transunion credit report,Transunion will notify any business that has recently pulled your report so they can make the necessary corrections on their own records.

Make all payments on time

One of the best things you can do to improve your Transunion score is to make all of your payments on time. This includes both credit card and loan payments. Late or missed payments can have a negative impact on your score, so it’s important to always stay up to date.

Another way to help improve your Transunion score is to keep your credit utilization low. Credit utilization is your total credit balance divided by your total credit limit. So, if you have a credit card with a $1,000 limit and a balance of $500, your credit utilization would be 50%. It’s generally best to keep your credit utilization below 30%, but the lower the better.

You can also improve your Transunion score by diversifying your credit mix. This means having a mix of different types of loans, such as auto loans, student loans, mortgages, and credit cards. Having a diverse mix of loans shows lenders that you can handle different types of debt responsibly and can be a good indication of future financial health.

If you have any negative marks on your Transunion report, such as late payments or collections, you can work on repairing your credit by catching up on all missed payments and paying off any outstanding debts. You can also dispute any inaccuracies on your report with Transunion directly. By taking these steps, you can help improve your Transunion score over time.

Use credit wisely

Your Transunion credit score is a computed numerical summary of the information in your credit report, which is a record of your credit history. The score is used by financial institutions to help them assess your creditworthiness. In general, the higher your score, the more likely you are to be approved for loans and credit cards at favorable interest rates.

There are many factors that contribute to your Transunion credit score, but one of the most important is your payment history. Payment history accounts for 35% of your score, so it’s important to make all your payments on time, every time.

Other important factors include:
-Credit utilization: 30%
-Credit history: 15%
-New credit: 10%
-Types of credit used: 10%

You can improve your Transunion credit score by using credit wisely and making all your payments on time. You can also try to improve your score by maintaining a good mix of different types of credit accounts, such as revolving (credit cards) and installment (loans).

Conclusion

Your Transunion credit score is used to assess your creditworthiness and determine whether or not you are a good candidate for a loan. A high credit score means you’re more likely to get approved for a loan with favorable terms, while a low credit score could result in higher interest rates and lower loan amounts.

Scroll to Top