I have to know whats my credit score as bad credit means high interest rates. It is not easy to tell whats a good credit score. The minimum score required will differ subject to the issuer. The factors that a creditor evaluates will shift continuously with the economic trends.
A credit score is a rating which is based on my financial history and it is meant to help the creditors to lend responsibly. A FICO score of 760 may be the low end of the ‘excellent’ category of a credit score. 720 to 760 may fall in the range of `very good’ scores. Banking institutions who issue premium credit cards will not want clients with a score under 720. A credit score is one of the most significant factors in my life.
The reason for knowing whats my Credit Score
A poor credit score will exclude me from offers of products and services that I can avail on credit basis. It can affect my ability to open bank accounts, get decent employment or get a good house. I have to know whats my credit score so that I am aware of why my credit rating is good or poor. To build a good credit score, I have to assess the components of a good score.
My poor credit rating could be because of over borrowing or difficulty with mortgage payments. I have to check whats my credit score because my credit report is regularly updated and with this kind of monitoring, I can then deal with relevant problems in connection with my credit score. A high credit score is crucial as it will indicate that I am a lesser risk to creditors. It will earn me a lower interest rate as a borrower.
Checking on whats my Credit Score will keep me alert
Identity theft frauds are becoming common. Checking on whats my credit score will always alert me to any activity that may be fraudulent and happening in my name. If I am a victim of identity fraud, I can take identity protection insurance to indemnify me against such frauds. Knowing whats my credit score is a crucial part of monitoring good financial health. Every time I want to get a car loan or purchase a property, the credit score always becomes an important factor in getting a low interest rate. My credit score is a three-digit number that plays an important role in my financial activities. Checking on whats my credit score will give me the option of correcting the inaccuracies on my credit report.
Whats my Credit Score made up of?
Every person who uses credit has a FICO score. FICO score is a rating between 300 and 850 which establishes my risk to the lenders. The credit score is compiled through monitoring by Fair Isaac Corporation and the three major credit bureaus of Experian, TransUnion and Equifax. All business people that give out credit use one of these reporting bureaus to establish credit worthiness of a client. I will be a lower credit risk if my credit score is higher and I will be able to get loans easily and at an attractive interest rate.
Over one third of my credit score is calculated on my payment history. Financial judgments like bankruptcy will have a negative impact on my credit ranking and this negative impact will last for seven years. It can make my life miserable while looking out for loans. A part of my credit score is made up of how much credit I have available and how much money I owe. A higher debt-to-credit ratio will lower my credit ranking. Some part of the credit score is based on the time duration of the credit transactions. Every time a lender makes an inquiry, it will reduce my credit score temporarily. Another factor that makes up the credit score is the types of credit I use in the form of credit cards, installment loans or mortgage loans. I can improve whats my credit score by taking action after understanding how the credit scores are worked out.