~credit score

 What Is Considered a Good Credit Score

What is a considered a good credit score? A lot of experts say that you should get a score of 700 and above so that you are able to get a loan at a lower interest rate. 

Is this easy to achieve? Given that 60% of Americans can do, then the answer is yes. You just have to pay your bills and debts on time to avoid incurring any penalties that could have a red flag on your credit report. 

The reason why there are still people who cannot get a good credit score is because they have spend beyond their means. They are unable to resist the temptation to use that piece of plastic in a store thinking that they can get away just paying the minimum requirement monthly but the difference grows thanks to interest. 

What happens is that they encounter late payments and are marked as “unpaid.” This is then reflected in their credit report which creditors will see and will make applying for a loan difficult to almost impossible. 

The only solution is to clean up your act and pay these debts. You will probably have to cut down on your expenses and sell a few items. If this is not enough, work overtime if the company you work for allows you to do so. If it doesn’t, see if you can get a second job. 

Try borrowing money from friends and relatives. The nice part about borrowing from people you know is that you won’t be charged an interest fee. Just and make sure you pay them.

Could this have been avoided? Yes if you were able to monitor your expenses. One of the present problems right now here in America is the housing crisis and if are one of those that couldn’t pay for it anymore, this has a significant effect on your credit score.

Now that you know what is considered to be a good credit score, the question now is can you do it? This is something you can answer on your own but if you need help, there are financial advisers that you can call on to help. You will have to do your share as well by sticking to the map that has been planned out.  

If you are just a few points away from reaching 700, look at your credit report again to see if there are any errors. Chances are, there is one there that you can correct as long as you can prove to the crediting agency that this is not true. 

Since they won’t take your word for it, be sure to have the supporting documents. Never send the original and instead send photocopies so you still have something to show later on. Once this is with them, an investigation will be conducted. If your claims are true, then they have no choice but to make the corrections on your credit score. 

The factors that are used to measure your credit score varies among the different crediting agencies. With that said, there is no standard as to what is considered to be a good credit score. Through the years, it was just accepted that anything above 700 is good so until this is standardized, this is something that everyone must hope to attain. 

What Is a Good Credit Score

Your credit score has a profound effect in terms of the interest rate you will be paying when you apply for a loan. This is the basis that lenders use to determine if you will be able to pay for the amount in the future and if you need money to pay for college or renovate the home, it is good to know what it means to have a good credit score?

The credit score ranges from 340 to 850. Creditors determine this by reviewing your payment history, amounts that you owe, the length of your credit history, the types of credits you have used and new credit. 

If your credit score is over 700, then you have a good credit score. This means you are more likely to receive other financing options and better interests compared to someone who scored lower. 

Majority of Americans approximately 60% of them have a good credit score. This means that while many of us are doing well, there are others who need to improve theirs. Should you be one of those who got a lower rating, don’t worry because you still have a chance to improve it. 

You can do this by paying off your debts especially if most of these are reflected in your credit card bill. The best approach is to deal with the credit card that has the highest interest rate then work on the rest. 

Should there be a problem coming up with the money, you must contact your creditor regarding the situation so a payment arrangement can be made so your late payments will be seen in your credit report. 

It’s nice to have many credit cards but if you have a hard time monitoring which ones were already paid, don’t even think of getting another one as this can lower your credit score. You also don’t have to close unused accounts because a zero balance can also work to your advantage.

At the same time,  people with good credit scores must never open new accounts especially if their credit history is less than 3 years old. This may bite you back later on since you may not be able to handle this properly. 

There are some who know that they deserve a higher credit score than the one that came out in the report. If you feel that there is something wrong, you must call your lender because it is possible that the limit that was reported is much lower than what you are aware of. Should this be the case, it is only right that you have this corrected. 

To know if you have a good credit score, you can get in touch either with Experian, Equifax or Transunion. These three are individual credit agencies and each of them should reflect the same figures. You should get a copy from one or all three at least once a year to know your current standing as your transactions this year may be higher versus the previous year that could either be good or bad for you. 

If you don’t want any problems make sure that you have a good credit score at all times. If you need help, there are financial advisers that are more than willing to help you out. 

What Is a Credit Report Score

A credit repot score is the basis used by lenders to determine if your loan application will be approved or not. If your credit report score is above 700, there won’t be any problems and your loan will be granted with low interest rates. If however you score below this figure, you will be charged a higher interest rate and in the most extreme cases, they will not approve your loan application. 

But how do creditors come up with this figure?  Basically, they do this by reviewing credit related information such as your payment history to find out if you have ever had any late payments or filed for bankruptcy. They will also check how much money you owe not only on your credit card bill but also outstanding loans. 

They will also take into account the length of your credit history. Also, a lot of people apply for new credit and a few other minor factors that could bring up or down your credit score. 

What is not in your credit report scores is your color, gender, marital status, national origin and religion as this is not relevant. Creditors do not also consider if you are receiving public assistance or any consumer rights that are under the federal Equal Credit Opportunity Act or the Fair Credit Reporting Act.

You can get a copy of your credit report score so you know what where you stand. You can get this from one of three credit reporting agencies namely Experian, Equifax or Transunion. Consumers are advised to get a copy at least once a year since it changes annually. 

If you credit report score is not satisfactory, you must do your best to improve it. Some of the things you can do include paying your bills on time, contacting your creditor regarding your situation so an arrangement can be made and seeing a non profit credit counselor who will help you manage your finances. 

As much as possible, you must never file for bankruptcy because it will be very difficult to achieve a good standing. 

When you happen to see errors in your credit report and believe that there is a mistake, you must write a letter immediately to the agency where you got this document so this can be corrected. You must state the issue and any supporting paperwork to strengthen your claim. Never send the originals so have something to hold on to and if this is sent by a courier, make sure that you get a copy of the return receipt so you can follow this up with whoever got it. 

The reporting agency will then conduct an investigation by contacting your creditors. If the creditor cannot verify their entry, they have no choice but to remove this from your record and you will receive a free copy of the revised credit report score. The same goes when an error has been made and a copy of this revised version will also be sent to other credit agencies. 

Now that you know what a credit report score is, it is time to find out what is your standing. This should be good at all times so you get the best deals when you have to apply for a loan to pay for college tuition, buying a car or a new home. 

Improving Your Credit Score

There are many things that you need to know on how to improve your credit score. This is especially useful and valuable if you wish to get the best deals on the various credit options that can be offered to you. A high credit score can ensure you that at least your credit applications have higher chances of getting approved.

A credit score can help lenders decide if you are good enough to extend credit to in terms in your ability to pay it off on time. Credit institutions are involved in a business where they aim to earn from the money that they lend as credit to borrowers. Providing the credit to people who are responsible enough to pay them on time would serve their best interests. And for them to determine who these people are, there is the individual's credit score to tell them.

A credit score is a calculated score based on a designed formula that would help lenders determine your credit risk. Your credit score would tell them if you have a good record when it comes to managing or handling your previous debts. Through your credit score, they can have a good assessment on how their decisions when it comes to approving or rejecting credit application would be made.

You would need to maintain a high credit score if you wish to be considered an attractive prospect the next time that you apply for credit. Lenders look for borrowers who they think would be able to pay back the money that they lend and so look into the credit score for determining your credit risk. The higher your credit score, the lower the risk and the better the chances that your credit applications would be approved.

There are many things that you can do in order to improve your credit score. One of the first things that you can do is to check your own credit report. The calculation of credit scores is usually based on entries that can be found on your own credit report. Your credit report is a record of your past credit history as well as other pertinent information associated with it.

Credit reporting agencies look into your credit report and, based on the different factors that they can get from it, would then calculate for your credit score. This means that you have to make sure that every entry made on your credit reports is accurate as possible. An error or wrong entry can have an effect on your credit score later on.

One of the best ways for you to improve your credit score is by trying to keep your credit payments on time. Missed payments can greatly affect your credit score. Just being able to promptly pay your debt installments when they're due would help keep your credit score up. If possible, you can also try to pay off balances completely as early as you can. Keeping your balances low can also greatly affect your credit score in a positive way.

If you are trying to avail of short term credit try to make sure that you don't try to open several of them at almost the same time. Having a lot of new accounts on a relatively short period would most likely lower your credit score. The same way goes with availing of several credit cards.

You may want to have a wide variety of credit cards handy so that you may have a better mix of available credit when you need it. But be also aware that doing so may also greatly affect your credit score. That would not work well in your mission on how to improve your credit score.  

How to Improve Your Credit Score

It may take some bit of work until you get the idea of how to improve your credit score. A credit score may be one of the most important aspects of your financial situation that would need your constant monitoring, especially if you always have the need to borrow money from lenders. Having a low credit score will ensure you of having trouble getting your credit application approved as you would have wanted.

Your credit score tells lenders of how dependable you are as a borrower. From your credit score, lenders and credit institutions may be able to gauge your standing as a borrower. That is because the credit score is a mathematical measure of a person's borrowing habits and behavior based on some important credit factors. A formula developed by the Fair Isaac Corporation (FICO) is usually used to calculate for one's credit score. That is why your credit score is also usually referred to as the FICO score.

When you have a low credit score, it tells the lender straight away that you are not a very prospect as a borrower. This may be based on your previous credit accounts from which you may have defaulted on, late payments of debts, bankruptcy or foreclosure issues that you may have in the past and other similar factors. The higher your credit score, the more attractive you are as a borrower in the eyes of the lenders. This might mean that your credit application from them might just be easier to approve.

There are many ways that you may be able to improve on your credit score. This will include having a closer look at your current credit standing. If you do have outstanding credit to take care of, it would be good to pay your bills on time. Delinquent payments of your outstanding credit have a major negative impact on your credit score. It is also important to note that the longer that you try to pay your bills on time, the better it will be for your credit score.

If you do find yourself missing on some payments, it may be wise to get current as quickly as possible on your payments if you so can. Staying current with your outstanding credit accounts may also have an effect on your credit score. What's more, your credit record, along with the missed or delinquent payments, may reflect on your credit report and will stay there for a period of seven years. It will be looked upon as a smudge on your report even after you have paid off your debt.

If you find yourself having a hard time managing your outstanding credit, it may be time that you contact your creditors or ask for the help of a qualified credit counselor. These actions may not immediately improve your own credit score. But the sooner you act in managing your debts well and paying your bills on time. It will eventually make your credit score better over time.

Once you learn how to improve your credit score, the better your chances will be on availing of a much needed loan or mortgage when you really need it. It would be frustrating for one to apply for some much needed credit and not get approved in the end, all because of a low credit score.

Improving your credit score can also assure you that you have better credit options especially during times that you might need it most. 

How to Raise Your Credit Score 

A credit score is an important part of your financial profile. This is because a credit score will determine whether lending institutions and banks will let you borrow money or not. This is especially important to people who would want to borrow money to put up a business. With a bad credit score, it is not only a business loan that you will have no access too. You can even be rejected when you apply for a car loan, a school loan, a housing loan and even a credit card. 

A credit score is the result of your whole credit history. It is determined by the way you handle your debts and credits. Do you pay them early and regularly? Have you had a lot of bad and late payments? Do you have a lot of credit cards and have big debts in all of them.

These will all determine just how high or low your credit score will be and whether you like it or not, these things are being recorded and filed by credit bureaus and credit reference agencies such as Equifax, TRansUnion and Experian. These three agencies are in charge of keeping tabs and recording credit histories of people. 

In fact, in the USA, Americans are given a free credit report every year by these three agencies. However, credit scores are not part of it. If people want to know their credit score, they have to purchase the information via the internet through these three agencies’ websites. 

If you do have a bad credit score, do not fret because it is not yet the end of the world. Actually, credit scores may be improved if you have the drive to do it. Here are some of the factors that may affect the credit score. 

1. pay your bills on time

One of the factors that affect a credit score is the way you pay your bills. People who pay their bills on time are seen as more responsible, trustworthier, better at financial transactions and are more able to handle their money. Thus, they are good candidates for business loans and credit loans.

2. Credit card handling

The way you handle your credit card and your spending habits will also affect your overall score. People who have maxed their credit cards and have not yet paid their bills will most certainly have low credit scores. This is because people who spend more than they should are not good candidates for a loan because they may just waste the money away. 

3. Having credit and a good one

People who have had loans in the past have better chances of getting a higher credit score than people who are just new in the game. However, these people should have also exhibited good credit history; otherwise, they will also have low credit score. 

4. Applying for new credits

People who have applied for new credits in a period of time will have a lower credit score than someone who have applied just once. This is because, people who have applied in a lot of banks are seen as desperate for financial support and may be a riskier subject than other people.

Also, some banks consider people who have applied in different financial institutions for a loan dubious and suspicious.  

Improve You Credit Score

If you want to borrow money from the bank but find out that your credit score is not that good, you won’t be able to get an approval unless you are willing to pay this back at a high interest rate but this can change if you are able to improve your credit score. 

Here are ten tips that will help you get started. 

First, stop spending money on things that you don’t really need. These include clothes, shoes, jewelry, CD’s, toys, a trip to the parlor, the spa or salon. You will miss them for awhile but when things get better, you can surely enjoy them again. 

Most of us use the credit card to pay for just about anything and part of cutting on your expenses means putting limits where you can use it. This should only be used to buy food and groceries as there are things that we need daily. 

Reduce the number of long distance calls that you make. If possible, cancel your service provider and get one that gives better rates. The same goes with cell phones since some companies charge lower for air time or allow you to make free calls at certain times of the day. 

Your utility bills come during the end of the month so that is another thing to worry about aside from the card bills. To lessen the amount you have to pay, conserve so you don’t use that much by lowering your thermostat during the winter and raising during the summer as well as turning off the lights when no one is in the room. 

To come up with the money you need to improve your credit score, try working overtime, getting a second job if it is possible and sell stuff that you don’t need. Keeping yourself will really help so you are not tempted to spend your hard earned cash. 

When it comes to your credit card, pay the one that has the highest interest first then work your way down the line. 

Strike a deal with creditors so that they are aware of what is happening because this gesture helps improve your credit score. 

As things pick up, close your unused accounts especially the newer ones. You can also apply for a new credit card preferably those offered by groceries and supermarkets as they offer lower interest rates than those coming from banks.

Also, review your credit report and see if there are any errors. Most of the time, there is one or two there that can be corrected as long as you have the supporting documents. If the investigation shows that there was an error or that the creditor cannot prove their allegations, this is immediately removed from your record and you get a revised copy with these corrections. 

Improving your credit score is something you have to do if you score is below 700. Doing so will allow you to have better rates from banks and other lending institutions when you want to buy a house, a car or undergo a renovation at home. 

So for those who are in trouble, there is still hope. You just have to make some sacrifices that will eventually pay off in the long term. For those who are in good standing, keep up the good work or make it even higher.  

The Meaning of A Credit Score 

A credit score is not the amount of purchase that you incurred with your credit card and neither does the term refer to the points that you save for every purchase that you make with the credit card. This is not the meaning of a credit score.

Although it does involve credit per se, it does not only refer to credit cards but to credit in general, or in more common terms, a loan. A credit score is the numerical product of your credit history, from the loans that you incurred in college to the purchases that you make with your credit card. All are being recorded and filed under one credit history that can come back and hunt you if you are not careful. 

A credit score is used by banks and lending companies to make decisions on your loan applications. With a not so good credit score, you may get rejected for a loan or if you are lucky will be given a fraction of the amount that you are asking, for a higher interest rate and a shorter payment period.

A credit score, you see, determines whether a person is reliable enough to be given the money to as a loan. For although, they will be earning from you through the interest rates that they put on the loan, banks and lending companies are still cautious because they do know that they cannot just lend their money to people they don’t know if able to handle money. 

A credit score depends on a lot of factor. One of which is your reputation as a borrower. Are you always late in your payments for your credit card? Are you always knee deep in debt because you cannot seem to get around to paying each one until the interests were just too high?

Do you have maxed out credit cards? Have you had any other credit or loan that you have paid for or are still paying? How many are they? Have you had any problems paying for your loans? These will figure in the credit score that you will have. 

Other considerations that make up your credit score is income that you are receiving currently. People who have high income are generally perceived as someone who can handle a loan. Another factor besides the ability to pay factor is the amount of debt that you have. If the bank feels that it is too much debt for one person, they can easily reject your application. 

There are many ways to get a credit score. The industry standard is the FICO score, named after its creator Fair Isaac Corporation. FICO score is being used by credit reference agencies, that will gather the materials about your credit history and then determine from their the credit score. Some use their own scoring systems that are comparable with the FICO score. 

The FICO credit score can now be determined by purchasing it over the internet through the website of credit reference agency, Equifax. The fee is $12.95. The other two credit agencies, TransUnion and Exparian are also selling their own score for roughly the same amount although TransUnion packaged it with their credit history report that people can purchase online. 

So now you know what the meaning of a credit score is? Let’s hope you will work on your own credit score. 

Tips on How to Improve your Credit Score 

So you can’t get a loan. It was probably your credit score that clinched the deal to the wastebasket. You see, when you apply for a loan, financial institutions and lending companies look at your credit score for guidance. People with low credit scores are more likely to be rejected for a loan or at best be given a small amount for a loan, with a high interest rate and a shorter time frame to pay the loan.

In contrast, people with high credit scores are given higher amounts of money for a loan, lower interest rates and longer time frame to pay the loan. This is because people with a good credit score are perceived as less of a risk, more responsible, more able to handle their finances and worthier to be given a loan.

Here are some tips that can help you improve your credit score. 

1. Keep a payment schedule

One of the factors that affect credit score is your reputation for paying your bills. Even if you pay them, but always late, it can still affect your credit score. This is why it is important that you keep a payment schedule if you really want to raise your credit score a notch.

You can do this by keeping track of all your bills especially your credit card statements. This way, you will not only incur additional charges in terms interests, you will also build for yourself a good credit history.

2. spend only when you need to

Another factor that affects credit scores is your credit card. If you often have credit cards that are maxed out and well and beyond its credit limit, your credit score will become lower. This is because a maxed out credit card reflects a spender who cannot handle finances. This kind of person is a risky candidate for a loan. 

3. Borrow from only one

Some people make the mistake of applying for a loan in more than one company all at the same time. Do not do this. Although banks do not actually check with each other, they do have their own ways of finding out if you have also borrowed money from other institutions. If this is the case, your credit score will take a nosedive.

This is because people who borrows from a lot of companies are seen as too desperate for money or is too needful of it. Some see this as a dubious way of acquiring money. So if you are afraid of getting rejected and you just want to make sure that you will get a loan, try waiting for one response before starting an application in another. That way, your credit score will not suffer. 

4. pay your outstanding debts

You may be paying your debts but you have a lot that you are not finished paying yet. This is also not good in your credit history. Although most companies would want to lend you the money because you are a good payer, having too many outstanding debts that you are still paying for may make them think if you can still manage to pay another one.

If you feel that you can pay one debt in full, pay it. That is one less debt for you to worry about. This will not only bring you a step closer to financial independence, it will also improve your credit score. 

Understanding Your Credit Report Score

Understanding your credit score is important since it may help you determine your chances of being approved on your credit applications. Your credit reports score usually will help lenders and credit institutions to determine if you are good enough for credit that you have applied for. Lenders would need to be ensured that people they lend money to are able to pay back their loans. That is the purpose of a person's credit report.

When a person applies for a personal loan or mortgage on their homes, lenders would usually check upon a person's credit history to see if one is a good borrower in that he or she pays back on credit dues on time.

A person's credit history would help lenders determine the risk of that they put themselves in when approving a person's credit. In a way, credit institutions are trying to protect their own investments (in terms of handing out credit) by checking out a prospective borrower's credit report score.

In essence, a person's credit report is part of the lender's background check. It is a detailed history of a person's borrowing habits. From it, lenders are able to extract the following information about the credit applicant:

• It provides a person's identifying information such as one's complete name, past and current addresses, date of birth as well as a person's employment history

• A record of accounts that previous lenders have submitted to who the individual has loaned from in the past. This record includes the type of credit extended (mortgage, credit card, car loan, etc.), the amount of credit, the date when it was opened and a record of payments already made as well as the remaining balance.

• A record of inquiries made on the credit report for a period of two years. This includes voluntary inquiries made for previous credit applications as well as involuntary inquiries made by the lender without the knowledge of the credit report holder. 

• A collection of information of state and country court records associated with previous loans made. The credit report also includes recorded information about previous bankruptcies, lawsuits, foreclosure of properties, liens and other judgments that can be attributed to previous loans made. 

When availing of the credit report, the lender or credit institution may also get hold of a person's credit score. A credit score is calculated based on the information that is provided by the credit report. This is usually done by credit reporting agencies that consider the information and provide the necessary score to help lenders better assess your future credit risk level. 

Your credit score is also being more commonly referred to your FICO score. The reason for this is because most of the credit scores are calculated using a software developed by the Fair Isaac Corporation, also known as FICO. Your FICO score can range from 300 to 850. The higher your FICO score figures, the lower your credit risk is perceived by lenders, thereby giving you better chances of being approved for credit.

Understanding your credit reports score makes it also easier for you to determine your own chances of being approved for a particular credit application. If you know that you have a high FICO score, you can then try your best to maintain or even improve on it in order to increase your credit chances with a number of lenders.

Knowing that you have a low FICO score may also do you some good. This knowledge will motivate you to act upon improving your credit score in order to make yourself less of a credit risks to lenders the next time that you apply for another loan. 

Understanding What a Credit Score Is 

You just want to get a loan and suddenly you are bombarded with all this questions about your credit score. And you don’t really know what to answer since you don’t even know what a credit score is. 

A credit score is your credit grade, representing how much of a good creditor you are. This score is dependent upon your credit history and credit report information, which is gotten from credit bureaus and credit reference agencies such as Equifax and TransUnion. Banks, credit card companies and lending companies use the credit score to have an idea if a person will pay what they borrowed in time. These scores will help these companies calculate their risk and determine if you will be lent to or not. 

Another use for the credit score is to determine how many percent interest rates will be given to the borrower and what will be the terms of payment. People with high credit scores will be given more time frame to pay their debts and much lower interest rates.

A person with a not so good credit score may be given shorter terms in their payments but high interest rates. This is because they are riskier to lend money to so the banks and lending companies would want to get a high interest from them at shorter periods of time. 

Because of the importance that credit score information gives to companies, banks and lending companies are now not the only ones that use these information. Even mobile phone companies, insurance companies, and private companies also use this information to check on the background of their clients and potential employees and see their character. 

There are actually a lot of ways to determine what a person’s credit score is. One of the most popular is the FICO score which was created by Fair Isaac Corporation. FICO is being used by lenders of mortgages to determine which borrowers are likely to default on their payments. A FICO credit score can range from 300 to 850. 

When before only financial institutions have access to their credit score, now it is being commercialized. Equifax is actually offering consumers a glimpse of their FICO score through their website for a fee, $12.95. The same goes with other credit bureaus such as TRansUnion and Experian but what they are offering is not the actual FICO score but their own scores. 

Both companies however swear that their scores are comparable to the FICO scores. Experian charges the same price as Equifax  for their score, $12.95 while TRansUnion charges $9.00 for a credit report that will also have the credit score. This can be purchased by mail, through phone and of course, the easiest course, online. 

Some however do not see the need to buy these things as they are entitled to a free credit report from each of the three agencies. Some states even give a free credit reports within 30 days of being rejected of a credit by a lending institution or when they receive a not so good credit terms because of their credit score.