Posted by admin on July 24, 2008
Some people don’t think their credit score matters all that much. After all, they are still able to get approved for the credit they want. What they don’t realize though is that they are throwing tons of money down the drain in the form of interest. The better your credit score is the lower interest rate you will be given.
Think about how long it takes to pay off a car or a home. An interest rate of 4.5% versus 9% is really going to impact the amount of money you pay each month. There are calculators online where you can compute how much it will cost you in the end for that car or home based on your rate of interest. You will be very surprised at what you find.
Doing so may motivate you to do something about your credit score. The highest it can be is 850. No matter what your current credit score is you should be able to make it better. There are plenty of scams out there that tell you they can do it for you overnight. They can’t, and they will only be costing you more money. With your own efforts though you can see results.
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Are you frustrated about your credit score? Maybe you didn’t realize before how important it was. Perhaps you couldn’t continue to make payments due to circumstances you had no control over. Regardless, you don’t have to continue allowing a poor credit score to ruin your life. You can take action to make it better.
Even if you think you have good credit there could be blemishes on it. Don’t assume all is well just because you got approved for the loan you wanted. There may be mistakes on your credit report. They happen quite often actually and can go undetected for years. That means you could be paying 6.5% interest on the loan instead of 5%.
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Your credit score is something that will be with you all of your life. You don’t want to blow it off as it can prevent you from getting the credit you seek. If you are approved it can result in you paying more in interest too. With a high credit score you can be confident when you apply for credit that you will get approved. You can also anticipate very good terms associated with it.
When you apply for credit, the lender is going to check into your credit history. They will get a number between 0 and 850 which is your credit score. There are five categories that are evaluated to determine this number. They include your payment history with all of your accounts (35%), how much money you owe with that debt (30%), how long you have had credit (15%), how recent you were approved for new credit (10%), and what types of credit you have (10%).
Do you know what your credit score is right now? If not you need to take the time to find out. If you have less than 750 you should strive to improve your credit score. There are several ways in which you can accomplish this. The one that will have the most impact is making all of your payments on time each month. Any time you are more than 30 days late on an account you will have a lower credit score. A single late payment can stay on your credit for up to seven years too.
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No one sets out to intentionally ruin their credit or to lower their credit score. Yet there are many activities you can take part in that will do just that. Being aware of them will help you avoid them. You certainly don’t want to realize down the road that your decisions led to your self destruction as far as your credit is concerned.
Some people don’t seem to care that their credit score is low. The fact that they are still getting approved for the credit they apply for is what is important to them. If you fit this profile though you need to stop and look at the big picture. You may be paying hundreds of dollars more each month than you need to. This is due to your low credit score resulting in higher interest rates.
The biggest portion of your credit score is due to your payment history. You need to do all you can to make each of your payments on time. Have some money in savings to cover your basic living expenses for a couple of months. That way if you do run into a hardship you won’t be struggling to pay them. Being late with one payment by 30 days can result in your credit score dropping by as much as 100 points.
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The process for being approved or denied credit seems to be faster and faster all the time. The technology used to determine it is attached to a credit score rating. Based on the personal information you enter including your name and social security number, a credit score is available to the lender. They will have their policies in place relating to what your credit score must be to be approved for a particular offer.
Most people don’t realize just how important their credit score is though. Sure, it can affect your ability to get credit but also employment. It can also be the difference between thousands of dollars spent each year on interest rates or in your savings account. Understanding how your credit score is determined is very important. It can help you to see where you need to make changes to your habits so you can have a better credit score.
The highest credit score a person can have is 850. Such individuals have no trouble getting the credit they want. They also get it at the lowest possible interest rate offered. You are encouraged to keep your credit score above 700 if you want to reap the savings as well. When you drop below 700 you will end up with very high rates of interest due to the risk involved in giving you the funds.
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Posted by admin on July 22, 2008
Before you decide to cancel those credit cards you never use, read this! Doing so can have an adverse effect on your credit score. That is because such a big portion of your credit score has to do with your length of credit. You may have a credit card with a low limit you got five years ago but never use. Still, it allows you to have more points on your credit rating than if you get rid of it.
Some people don’t like the risk associated with having such credit cards floating around though. If they get lost or stolen they worry they will be liable for the charges. You can remove the credit cards that fit into this category from your wallet though. You can choose to cut them up if you wish. Just don’t call the creditor to cancel them. You can also put them in a safe location at home.
If you have a very good credit score, then closing an occasional account may not hurt you too much. However, if you fit into the category of consumers below 650 you can see a huge difference. Even losing five or ten points on your credit score by closing an old credit card account can put you on the side of the line where the lender has to deny your credit request.
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It is vital that you know how to build your credit score. Not only does it affect your ability to get credit, it can influence the decision of an employer to hire you or not. More and more employers are requiring both background checks and credit history checks before they will extend a job offer to a person. It is their way of protecting their assets as well as other employees.
In many areas, insurance is mandatory on vehicles and homes. Did you know your credit score can also influence the rates you pay? Even if you have never filed a claim or had a speeding ticket you could end up with high premiums if your credit is bad. That is why it is so important that you do all you can to keep it on the right track. Pay your bills on time and keep your rate of debt low.
Don’t just assume that everything on your credit reports is accurate either. You may be surprised to find out that an error has been in place for years. It may not have prevented you from getting credit, but it certainly increased the amount of interest you paid. Make sure you look over all the details from all three credit reports once a year. Report any errors immediately and follow up to make sure they have been taken care of.
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Posted by admin on July 9, 2008
You need to do your best to have a high credit score. It is going to affect your ability to get loans for personal use, cars, and homes. It will also affect your ability to get unsecured credit cards. Your credit score informs lenders how responsible you have been with your credit thus far in your lifetime.
There are several components that make up your overall credit score. They include your history of making payments on time, how much money you currently owe total on all of your debts, how long you have had credit, how often you apply for credit, and the types of credit you have.
There are three major credit reporting bureaus where all of the information collected is located. They are Equifax, Experian, and TransUnion. It is to your benefit to review a copy of your credit report from each one of these businesses annually. You can call them to obtain them or do so online. You want to make sure that all of the information on each of them is correct. If there are errors lenders could be seeing a lower credit score linked to you than they should.
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