by LeRoy
Just about everyone who has been an adult for any amount of time knows the importance of establishing and maintaining a good credit score. It is your credit score, as determined by the three credit reporting bureaus, that determines your creditworthiness. Lenders of all sorts, and even landlords and insurance agents, are likely to pull your credit history practically before they shake your hand and say, “Nice to meet you.”
Do you know your credit score?
Do you wonder how TransUnion, Experian, and Equifax calculate credit scores?
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by LeRoy
What is the credit score scale and how do you know whether you have a good or bad credit rating? Well, the credit score scale may seem dark and mysterious, but it really isn’t all that complicated. Here is what you need to know about your credit score and the credit score scale.
The credit score scale ranges from three hundred (300) to eight hundred and fifty (850). That means that if you are alive and there are records of you, there is no way you can have a credit score less than 300. If you have only a little bit of debt, you have had it for a long time (many years), and you have never missed a payment or been late with a payment, and you have an income, you might just have the perfect score of 850. Of course, very few people have either the lowest or the highest possible score; just about everyone falls somewhere between the two extremes.
If you want to fall at the very top level of the credit score scale, you should shoot for a rating of at least 720. At one time in the not too distant past, you may have been considered at the top of the game is your score was above 680, but no more. Just about every lender gives the best terms and interest rates only to those whose credit score falls above 720 on the scale.
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by LeRoy
In the United States, there are three major credit score agencies, or credit reporting agencies; they are TransUnion, Equifax, and Experian. The three credit score agencies are responsible for gathering and providing information on individual consumers. Banks and other financial institutions, as well as landlords, utility companies, and even insurance agents, have come to rely heavily on the information that credit score agencies provide as a means to determine the creditworthiness of individuals. If you intend to ever purchase with credit, the credit score agencies are likely to have a direct influence on your lender’s decision about whether or not to extend you credit and how much it will cost you to borrow money, i.e., what your interest rate will be.
Since the credit score agencies have a direct bearing on your financial life, it is important to make sure that you are careful to avoid behavior that will negatively affect your credit history, and it is equally important that you check your credit report periodically to ensure that the information is timely and accurate.
What types of transactions and credit information decreases your score? Having too much debt. The credit score agencies look at your income and how much debt you have; this is called your debt-to-income ratio, and if it is too much, your credit score will be lowered. Generally speaking, the credit score agencies and lenders like your total debt-to income to be no more than about thirty-six to thirty-eight percent. Even if you have been able to keep up with your payments and have made your payments on time, it is still considered important that sixty-two to sixty-four percent of your income is not involved in paying off loans.
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by LeRoy
In today’s society where we are in a generation which is very influenced by credit transactions, bad credit may definitely cause misery in one’s life when it is not resolved.
Imagine, without a good crest standing, you could not easily get a good apartment, much less a mortgage.
This article may help you to avoid the mistakes that may lead to a bad credit, and this may provide ways to an easier and faster credit Repair.
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