Posts Tagged ‘credit score’
Posted by: admin in on March 25th, 2009
What exactly is a credit score? What type of formula decides my score?
A credit score isthe most common method that represents the level of risk that a specific individual may be for securing any type of loan, shown in numbers that are between 349 and 849. The higher the number that’s shown in an individualâ€™s credit score gives creditors the assurance that they need to know that a person will be more likely in a position to repay a loan, and less likely to be one of many that default. These numbers are figured by a special math formula that is used to measure a variety of different types of helpful information that are obtained by public records, information from your previous payment history, as well as the ratio of debt to income.
Why is it so important to check my free credit report? Why do I need to know my score?
In todayâ€™s society it is a known fact that there are constant increasing problems that concern issues with fraud. This is a very good reason that makes it vital to consistently check the status of your credit report. The sooner you are able to detect a fraudulent matter, the faster and easier it will be to clear and remove any acts of fraud that may have been committed on your credit report. Problems that are simply left unnoticed can end up costing you a tremendous amount of valuable time and a large amount of hard-earned money in the long run. When an individual has the ability to obtain important information that is contained in your credit report, it then makes it very easy for them to steal your identity and open fraudulent credit cards, banking accounts, utility services, and even loans.
There are several situations you will want to check your credit score:
- When you apply for a job
- When you try to purchase an automobile
- When you would like to obtain a credit card
- When you would like to secure any type of loan
It can be extremely important to maintain a credit score that is above 650. Otherwise your financial well being for the future can be greatly affected. Now is a great time to make improvements, so be sure to obtain a free copy of your 3-bureau credit reports, along with a free copy of your credit score. These can be easily obtained online and then you can begin the important process of making an improvement to the worthiness of your credit.
Don’t waste any more time! The Internet is a valuable source that makes it very easy to obtain your personal Credit Report, along with all 3 Credit Scores!
If you’ve been hearing about free credit report and free credit score offers, you’re probably wondering what the big deal is. Unless you don’t have a problem with paying high interest rates and fees to lenders, you should consider getting some background information about your credit. Consider this, the range of your credit score can affect how much you will pay for your monthly mortgage payment, for example:
If you have a good credit score:
Mortgage Loan Amount: $250,000
Interest Rate: 6.75%
30 Yr Fixed Rate Payment: $1,621
Total After Finance Charges: $333,734
Your credit score is very important. That three-digit number could decide whether or not you get a house, a car, or sometimes even a job. It’s how potential lenders decide whether or not you’d be credit-worthy. Here, you’ll find out a few things that will negatively influence your score, and what you can do to prevent them.
Always, always try to pay your bills on time. 35% of your FICO score is your bill payment history, and consistently being late with payments will bring your score down. The only thing that’s worse than paying late, is not paying at all. Not paying on time will also result in late fees and other assessments by your credit card company. Paying on time, month after month, will not only keep your score from declining, but may improve it. Not paying for months on end will probably result in your account being charged off, and possibly sent to a collection agency.
Having an account sent to collections is very damaging to your credit score, and also to your future chances of getting credit, because it shows lenders and credit card companies that you don’t fulfill your end of the contract. Paying your bills on time will save a lot of money and stress in the future.
The modern financial market is highly competitive, specifically when it comes to lending money. Something to keep in mind for your benefit, is that establishing good credit today will ensure that your future credit will be secure, as well as have the necessary flexibility to grow. From birth, everyone starts with zero credit, it is something one must earn. There are a variety of factors, twists, and turns that can contribute to your score, affecting it either for better, or for worse.
For starters, you need to understand that your credit score is determined by the 3 major reporting companies as a result of your credit history. Keep in mind, however, that the 3 companies have no contact with each other on your info. Instead, they report on their own witness to what they interpret in regards to your credit. This creates the issue of common errors on credit reports because there is no one who knows 100% what is what. The only thing you can do, is keep on top of each of the 3 scores you have, and if there is an error, correct it across the board. However, remember that you can’t dispute a credit error unless you know all 3 of your scores.