~ Credit Score Chart
Because it does not take into account gender, race, religion, martial status or national origin, it is fair. What they use as basis is your behavior over the past few years. They will look into your credit history to see if you have any debts or outstanding loans, lines of credit and how long have you been given credit.
There is a certain percentage on each of them so if you don’t do well in one, there is a chance that you could improve on this in the others.
The one that is used by credit agencies is the FICO score and this information is available to you and to the lender.
The credit score chart is from 300 to 850. Majority of Americans score above 700, which is good and makes it easy for them to get credit and even waive a deposit. A small number don’t do well and they have to work hard to improve it.
Keep in mind that the credit score chart is just numbers. They don’t tell you how to improve your score or maintain it. So, to help you along the way, here are a few things you can do.
First, pay your bills on time. This comes monthly and you are given time to pay for them so make sure to deposit the amount before the due date to avoid paying penalties.
Second, decrease your debt. Surely, apart from your monthly credit card bills and utilities, you have may a few loans. Since you applied for these, it is only right that you live up to your end of the bargain by paying these at the agreed upon date.
Third, if you think having multiple lines of credit is good, think again. Studies have shown that this backfires on the person since they are more at risk of non payment which in the end has a negative effect on your credit score. So, if you don’t need it, don’t even bother and if you do have, get rid of them.
Fourth, review your credit report. If you have paid your bills and loans on time but your score is not that high, check for errors. Most of the time, you may find one or two things there that are not true. If this is the case, call the crediting agency and send them the supporting documents to prove your case.
The standard protocol here is for the crediting agency to conduct an investigation. If your creditor cannot dispute what you have claimed, then they have to change and a revised copy of the credit report will be sent to you for free.
If you want to get a credit score report for free, look at the different agencies that provide this service and compare them. Some will give you a copy for free while others will ask you to pay a certain amount monthly.
You can also find a credit score chart by going online since this is posted which saves you the trouble of looking at different sites.
Credit Score Explanation
Numbers have different meanings. In school, you are given an “A” if you excel in a particular subject. In the real world, a 600 or 700 could have an effect on your ability to get a loan. This is called your credit score and to give you an idea, here is an explanation.
The credit score is an indicator that tells lenders if you will be able to pay the amount that will be loaned to you. The scale goes from 340 to 750 and the higher it is, the less risk the lending institution is taking because they know you will be able to pay for it with interest.
If your score is below 700, you can still apply for loan but expect to pay at a higher interest rate as this is the only way that the lending institution can be sure you will be able to pay them back.
Your credit score is calculated based on several factors. Thirty-five percent of the total score is based on your credit history. You could get a perfect score here or have a few deductions if ever you have had any late payments or bankruptcies. The more recent it is, the greater the deduction.
Thirty percent is based on outstanding debt. This may come from car or home loans, credit cards bills and utilities. If you use your credit, make sure you only use 25% of the limit or less so it does not have effect on your credit score.
Fifteen percent of the credit score comes from the length of time that you have had credit. The longer you have it, the better because this will give creditors an idea of your consumer behavior.
Ten percent of the score is from the number of inquiries you have made in the past. The trick here is not to have many inquiries. Those who do inquire frequently give creditors the impressions that you are piling up your debt.
The last ten percent is based on the types of credit you currently have. This includes the number of loans and credits that are available to you. This weighs heavily when you are just establishing your credit history.
There is no actual passing or failing mark when it comes to your credit report. However, creditors have designated 700 to be the ideal credit score you should get. Sixty percent of Americans are able to achieve this so it shouldn’t be that hard for other people.
But if you are one of those that are not able to reach it, you can still improve on your score. If you have outstanding debt, pay for it. If these are credit cards, make sure that this is paid on time.
If you are having a hard time, try to negotiate with the lender so an arrangement can be made and this doesn’t have to appear anymore on your record.
Now that the credit score has been explained, you will now be able to interpret what those three digit numbers mean when you get a copy of your credit report. Aside from looking at the total score, review each item carefully so that if there are any errors, this can be reported and corrected.
The credit score also changes annually so don’t forget to get one a new one the following year.
Credit Score Ratings
When you apply for a job, the employer will do a background check before hiring you. Banks and other lending institutions do something similar to make sure you can pay for the loan by looking at your credit score ratings.
The credit score rating is used not only in United States but other countries as well. How they call it and the figures they use may be different but it is designed to do the same thing.
How this is computed depends on different factors such as the amount of your outstanding loans, the length of your credit history, the types of credit you have used and any new credit.
Each of these factors has a certain percentage so your credit score rating could be from 350 to 750.
People who have a good credit score rating will be able to apply for a loan at a low interest rate. Those who are in the red will have to pay at a higher interest rate or have to face the fact that their request has been disapproved.
You can get a copy of your credit score rating by asking for a copy from an accredited agency. These are namely Expedia, Equifax or Transunion. If you browse through their website, you can already see it after you fill up the fields on the screen.
But what if I have a poor credit score rating? The good news is that you can change this but you will have to cut down on your expenses so the money saved can be used to pay off your debt.
Sacrifice on your part may mean only going shopping to buy the essentials such as food, clothes and gas.
You will have to forget about buying any luxury items or going to the spa for a while since these are just unnecessary expenses.
If you have more than 2 credit cards, pay them off and then cancel them. A good idea will also be to go around with only one card in your wallet and the other at home that will only be used for emergencies.
People who are in deep financial debt will probably have to sell some valuables to prevent the debt from getting bigger due to interest.
If all else fails, you should get the help of a financial advisor to come up with a plan.
There are also a few companies out there that can help improve your credit score rating to what is known as debt relief or consolidation. This looks good in the short term but it does not make things any better.
When the debts have been paid, this is the only time that you can breathe easy. You can give your credit score rating a boost by applying for a new credit card by getting one offered by supermarkets and groceries since they offer low interest rates to card holders.
By paying debts on time, you will be able to see a significant improvement in the credit score rating this year compared to the year before which just goes to show that with a little sacrifice and work, this problem can be overcome.
As for those with good credit score ratings, keep up the good work because paying for what you purchase and borrow will allow you to do this again in the future without any problems.
Credit Score Repair
If you happen to be one of those with a low credit score, don’t worry because help is on the way. Reading this article will give you an idea of how to repair your credit score so you get to see positive results the next time you get a copy from a credit agency.
Credit score repair starts by getting a copy of this document from a credit agency. There are three to choose from namely Expedia, Equifax and Transunion. The basis of this figure lies on your credit history, outstanding debts and length of credit.
The next thing for you to do is to examine it. Most people have at least one or two errors that can be corrected if you have supporting documents to refute those claims. These should be mailed to the credit agency who handed the credit report so they can conduct an investigation and make the necessary corrections if what you say happens to be true.
However, if the negative information is true, the only thing you can do is pay those debts. You have to remember that late payments and charged off accounts will remain in your record for the next 7 years. If ever you filed for bankruptcy, this will be kept on file for 10 years.
The challenge of paying for debt is that you don’t have to pay the amount in a lump sum. The only way to do this is to pay these slowly and to prevent it from being reported, you have to talk with the creditors regarding your situation and work out a payment plan.
If you are successful in making a deal, then you have to make it happen by coming up with the money. This can be achieved by cutting down on your expenses and using this to pay off the debt that has the highest interest rate. Once you have passed that hurdle, it is time to work on the rest.
The objective here is for you to be able to close unneeded or unused accounts so you end up carrying only 2 credit cards left in your wallet.
It is advisable to end the newer ones rather than the old ones and if there are many, do this over a period of several months. You should verify that they were closed so this will also be reflected in your report.
You can use the same strategy for fixed loan payments but remember that this is just a short term because you will be paying more due to interest but at least it allows you to stay current and aids in credit score repair.
Surely, you want to keep some money to be able to buy necessities like food, clothes and gas. In order to earn interest, you should open a savings account at your back. This gesture also shows creditors that although you have credit problems, you are determined to get yourself out of the hole.
Repairing your credit score will not be accomplished overnight. You will have to change your lifestyle for awhile until things get better and when that happens, you should make sure that this stays that way. If you need help, get a financial adviser who will help you every step of the way so you won’t be in debt again.
Credit Score Scale
The credit score scale is an indicator used by lending institutions to find out if you are credit worthy. This could be from 340 to 850 and the higher the score, the better off you are.
You can get a copy of your credit score scale by getting a copy from an accredited credit agency by giving them a call or requesting for one through their website.
These three credit agencies are namely Expedia, Equifax or Transunion and you can get a copy from one or from all three at the same time or after a few months.
Majority of Americans get a score 700 or higher on their credit score scale. Sadly, there are a few who score lower. How this is determined is based on 5 factors.
The first is your credit history. This includes the number of loans that were approved or disapproved, your credit card transactions and other financing which you may have acquired over the past 2 years.
The creditors will also review if you have had any late payments in the past. If you have always paid this one time, then that is great.
Another indicator will be the length of your credit. If you have had this for years, then you have an advantage compared to someone who is just building up their credit. New credit is also a factor together with a few other things that could make the scale go up or down.
If you happen to be delinquent in any of them, you must do whatever it takes to correct it so there will be an improvement in your credit score scale.
You can start by cutting down on your expenses and using the money saved to pay off the debt.
For those who have a lot of credit cards, you should pay off first the one that has the highest interest rate then work on the rest. The objective is to be debt free and only have 2 credit cards left in your wallet.
Worse case scenario if you don’t have the money is to sell some valuables so you pay it off without worrying anymore of the growing amount due to interest.
If you can’t handle the situation, get help from a financial advisor. This person ma help you negotiate with creditors as to how this problem can be solved.
Only when you are debt free can your credit score scale ever improve. You should know that this is not going to be easy and this could take months before things look better but if you put in time and effort, there is no doubt that you will be able to apply for a loan once again.
There are some who say getting a new credit card will help just make sure that this one offers low interest rates and that you only use up to 30% of the maximum limit at times that is just about right.
The credit score scale changes so it is best to get one annually. It can go up or down depending on your behavior so if you keep your nose clean, there won’t be any red flags on your record. You should also remember that sometimes, it is not your fault if it goes down which is why you should check if there are any errors so this can be corrected.
Facts About Credit Scores
To people who are not familiar with the term credit score, they often assume that this is the score that we get in our credit cards for the number of purchases that we have made every year. But nothing is further from the truth. Credit scores are actually the grade that you get depending on how reliable a person is in paying their debts and credits.
Credit scores are determined by a lot of factors, how much your outstanding debts is, how regular do you pay for it, how much you spend and how much you earn. It will also be determined by your past credits and how were you as a borrower. These are all being gathered and recorded by credit bureaus and credit reference agencies like Equifax, TRansUnion and Experian.
So if you think, you are the only one who knows that you owe a credit card company a big amount, think again because they do keep records and what is more, all the credit transactions that we get are being filed for future reference of every credit and financial institution in the country.
Credit scores is important because it can mean being accepted or rejected for a loan. With a really bad credit score, you may not be able to get a house loan, a car loan, a school loan and even a credit card. In short, with a bad credit history, your days of borrowing money is history. As an added salt to the injury, it is not only credit card companies, lending companies and banks that do get information from the credit scores.
Even private companies and government agencies use this to background check a current employee or a potential employee. You see, a credit score will determine a person’s financial savvy and sense of responsibility. This will also show just how much a person is willing to face up to a problem instead of running away from it.
This is especially true with employees that are being hired or were hired to assume posts that deal with really sensitive financial issues or those who are directly in contact with money. A credit history and a credit score is important in determining if they will be able to handle the finances well.
Mobile phone companies and credit card companies also use credit scores to determine the clients that they should target. People who have good credit scores are often those who have the spending power. Thus, they are good people to offer mobile phone packages and credit card services.
In securing a loan, credit scores are also used in determining the kind of loan that will fit your credit profile. People who have high credit score are given higher amounts in loan, lower interest and longer time frame in which to pay the loan.
In contrast, people who do not have a good credit score may be refused a loan or at the very least be given a small amount in loan, much higher interest and shorter time frame to pay the loan. This is because credit card companies and lender also want to protect their interest. Low credit scores are more riskier and therefore warrant higher interest rates.
Credit scores can be purchased through the internet via Equifax. They will send you your FICO (Fair Isaac Corporation) score for a fee, $12.95.
Fixing Your Credit Score
It is time to fix your credit score when you begin to find it hard to get your credit applications approved. In fact, the best thing that you would have done is by trying to maintain a good credit score. But if you end up with a low credit score, it is not the end of the world. There are ways in which you may still be able to fix it up. But doing so would take a lot of effort and may take some time.
The reason why a credit score is important for lenders is that it provides them with an assessment of how you have been doing on your past credit. Your credit score may show them how responsible you've been on your finances. It is a way for them to ensure that their own business in terms of providing credit to borrowers would not end up badly. It would also help them determine if you are worthy enough for the loan that you have applied for.
This will give you a pretty good idea on how a good credit score will affect your credit standing. A high credit score would provide some benefits to an individual. For one, a person with a high credit score would be able to get the best deals on a home or even a car loan. High credit scores may also even give lenders the option of offering loans with lower interest rates on their mortgaged homes or cash loans.
But when you have a low credit score, the biggest disadvantage is that most of your credit applications will end up being rejected by most credit institution that you come to. They will see you as a risky prospect to lend their money to. And if ever you do get approved for credit, oftentimes it comes with a higher interest rate. This means that you will have to pay off higher amounts than what is usual. This can also become a burden in the long run.
Fixing your credit score is not an easy matter and may take a lot of effort and time. But there are ways that you may be able to employ to fix your credit score. You may have heard of several credit repair companies online that will offer to fix your credit score for you. Some would even offer to fix your bad credits in a matter of weeks. It would be a very attractive offer considering that you have a low credit score and would want to have it fixed as quickly as possible to get that credit application approved.
But bear in mind that fixing a credit score is not easy, even for so called credit repair companies. Quick fixes are not usually possible considering that correcting just a misprint or error on your credit report would take several months to correct. So be wary of promises made by some credit repair companies to quickly fix up your credit score. If what they say is too good to be true, chances are, it probably is.
The best way to be sure of such companies should you hire for their services is to research on them first. It would do you best to learn about where they are located and how they can be contacted. Make sure that they are legitimate enough to do business with.
If not, some credit repair agencies would sometimes resort to unethical credit repair measures to fix your credit score which can get you into more trouble. Try to be wary of such companies.
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