Do you understand what a credit score is all about? Here’s a little general information on what a credit score is, how it’s determined, and how it affects you. If you have some basic questions about what that statistic means and how it’s used to decide your credit worthiness, you may find the answers here.
Credit scores are used by almost anyone you deal with in terms of money, meaning that it’s not just the bank or your credit card company. A potential landlord will look at your credit history to decide if you’re likely to pay your rent on time, as will your cell phone company to see if you’re going to pay bills on time. The banks and credit card companies also use them to decide your interest rates and what limitations should be imposed on your loan or credit line.
There are a few different methods for statistically analyzing your credit score. In the Unites States the number determined by FICO, ranging from 300 to 850, is the most commonly used score.
Between these two numbers, anything below 600 is considered a very poor score and lenders will be quite wary of giving you a lot of credit or a low interest loan. Going above 690 is considered an excellent number and with such a high score you’ll find high limits on your credit cards with few restrictions and good interest rates on any loans you take from the bank.
This number that is so influential on your monetary transactions is determined by a statistical analysis of your history with credit. It’s a combination of any outstanding debts you have now or have had at any time, plus the amount of credit you’re using, the amount of new credit you have, and how quickly you pay your bills.
If you’re worried about what your credit history may look like to potential lenders, know that you’re allowed to order one free credit report from the government a year, and that you can contest anything you see on that report. It’s good to keep in mind that your credit history not only affects your interactions with banks and credit card companies but also landlords and the cable company.
Learning about your credit history and being informed on the relevance of a credit score can help you to get a good score and make lenders more willing to give you credit at good interest rates. This number is very important for your financial future and making big purchases like a house or a new car.
Learn more about what credit scores are at Quick Fix Credit Score. You can also receive your free report on 10 Free Steps To Instantly Start Repairing Bad Credit!