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Credit Scores Explained
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Credit Scores Explained

There are various credit score models available. Some credit scores are free and accessible by consumers. These scores are often referred to as “education scores” because they educate a consumer on broadly understanding their debt and help guide them on ways to improve their score. These education scores, however, are not the same scores that lenders rely on to determine creditworthiness.

To help determine creditworthiness for an NJCLASS family loan, HESAA utilizes the FICO™ 10 credit score which is based on Equifax data. While consumers can request their FICO™ score from Equifax, there is generally a fee. It is also important to remember that credit scores are dynamic and can change daily based on a consumer's buying habits.

Each of the credit monitoring companies has their own proprietary formula. This means the model used by a mortgage lender will not be the same model used by a car dealer or by a student loan lender. For example, if a consumer has missed several car payments or shows a pattern of late payments, this could carry extra weight when calculating the credit score by a car dealership.

FICO™ scores are generally calculated using five data points that are in your credit report with varying weight given to each: Satisfactory Payment History (35%), Outstanding Balance (30%), Length of Credit History (15%), Types of Credit (10%), and Recent Inquiries for Credit (10%).

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credit score chart