In today's fast paced world, a good credit rating score is crucial, as it can help you to acquire the credit you need for the type of lifestyle you prefer.
Without a good score, you will find it almost impossible to get credit for a car loan, home mortgage, or even a department store or gasoline credit card.
Credit scoring is a heavily used system that lenders rely on to tell them which consumers they can safely extend credit to.
How Does The System Work? Your credit score is intertwined with your credit report.
Whenever you apply for credit, a lender will closely peruse your file in order to determine your credit worthiness.
There is quite a bit of information about you in your credit report, such as how promptly you pay your bills, how many different open credit accounts you may have, how much outstanding debt you have, how long these accounts have been open, whether or not you have ever had any late payments, or whether or not any of your accounts have ever been turned over to a collection agency.
The lender compiles all of these facts into a profile, and uses this to help determine your credit worthiness.
All of this information is compared against the information of other consumers who have a profile that is much the same as yours.
What Does A Good Score Do for Me? A good credit score will help you to get the best interest rates possible when the time comes for you to get a loan.
It is interesting to note that you must have a higher credit score to qualify for a home mortgage than for a department store credit card.
Generally, lenders will differ in what they perceive to be a good score.
If a lender has many risky loan clients, he may well require a higher credit rating score from a borrower in order to assure himself and his company that the loan will be repaid.
How Can I Improve My Score? A good way to make sure that your credit score doesn't dip lower is to keep a close eye on your credit report.
Take advantage of the free copies you can get several times a year to make sure that there are no errors on the report.
Be aware that each time you apply for credit; it affects your score, especially if you have applied at several places in a short length of time.
This does not apply to automobile and home loans, as it is normal to make inquiries more than once for these and the scores take this into consideration.
All told, applying for credit only affects you score by a small percentage.
Much more important is how diligent you are at paying your bills on time, and how much total debt you are carrying.
Careful attention to a good credit rating score can raise your score 40-50 points in the space of one year.
Without a good score, you will find it almost impossible to get credit for a car loan, home mortgage, or even a department store or gasoline credit card.
Credit scoring is a heavily used system that lenders rely on to tell them which consumers they can safely extend credit to.
How Does The System Work? Your credit score is intertwined with your credit report.
Whenever you apply for credit, a lender will closely peruse your file in order to determine your credit worthiness.
There is quite a bit of information about you in your credit report, such as how promptly you pay your bills, how many different open credit accounts you may have, how much outstanding debt you have, how long these accounts have been open, whether or not you have ever had any late payments, or whether or not any of your accounts have ever been turned over to a collection agency.
The lender compiles all of these facts into a profile, and uses this to help determine your credit worthiness.
All of this information is compared against the information of other consumers who have a profile that is much the same as yours.
What Does A Good Score Do for Me? A good credit score will help you to get the best interest rates possible when the time comes for you to get a loan.
It is interesting to note that you must have a higher credit score to qualify for a home mortgage than for a department store credit card.
Generally, lenders will differ in what they perceive to be a good score.
If a lender has many risky loan clients, he may well require a higher credit rating score from a borrower in order to assure himself and his company that the loan will be repaid.
How Can I Improve My Score? A good way to make sure that your credit score doesn't dip lower is to keep a close eye on your credit report.
Take advantage of the free copies you can get several times a year to make sure that there are no errors on the report.
Be aware that each time you apply for credit; it affects your score, especially if you have applied at several places in a short length of time.
This does not apply to automobile and home loans, as it is normal to make inquiries more than once for these and the scores take this into consideration.
All told, applying for credit only affects you score by a small percentage.
Much more important is how diligent you are at paying your bills on time, and how much total debt you are carrying.
Careful attention to a good credit rating score can raise your score 40-50 points in the space of one year.