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| Credit Score Overview: What You Need To Know |
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| Written by Tawana Rashing |
| Tuesday, 22 September 2009 11:05 |
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It's amazing how big an effect three little numbers can have on you, but make no mistake, your credit score is one of the more important numbers you'll be associated with throughout your life. Your credit score can affect just about every major buying decision you make, from applying for credit cards, buying a car, even buying a home! Most lending institutions will examine your credit score and history to determine your lending eligibility. Any time you request a loan or apply for a credit card, your credit score will be pulled. Lenders look at your credit score to determine whether you are a high or low risk lendee. If your score is high, you'll be approved - if it's low, then your loan will be rejected. The higher your credit score, the lower your interest rate should be as well. So what is a credit score exactly and who or what determines what yours is? First off, credit scores are determined by the big three credit reporting bureaus, such as Equifax or TransUnion. That means you technically have three distinct credit scores, though all should be around the same number. The credit bureaus determine your credit score by examining your credit report and history. There are many different things taken into consideration, such as the level of debt you've accumulated compared to your income. They also look at the credit limit you still have available, whether you make payments on time, if you've ever missed a payment and more. Taking all this information into account, the big bureaus then assign you a credit score - which is really like a grade. The highest you can hope for is 990, but consumers with perfect scores are hard to come by. In fact, not every agency's credit score measurement is as high as 990. Some stop around 850. Typically, a good credit score is anything over 700. A score of 700 or more will get you approved for most practical loans, and net you a decent interest rate as well. The higher your credit score, the better interest rate you are likely to get. Your credit score paints a picture of you as a consumer to any company pulling it. It gives them an idea of how responsible you are with your money and paying debts. It even gives them an idea of how early on you began building up your credit, or if you haven't at all! You may even have to allow potential employers to pull your credit score and history nowadays. Given how important a credit score can be, you should find ways to keep on top of your credit score and report. Many sites online offer free trials so that you can pull your score and report without paying. It's important to do your research on these sites though, and not get sucked into paying for information you can get for free. Keeping on top of your credit score will allow you peace of mind the next time a big buying decision pops up. About the Author: The author, Tawana Rashing, is an expert credit repair counselor who helps consumers improve their credit score. She also writes freelance for several websites about credit tips, counseling and repair. Her hobbies include gardening, biking, scrapbooking and spending quality time with her family. Kindly provided by LJ-Marketing.dk You are welcome to use this article on your own website, if you include the link just before this text. |
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