| |
When Your Credit Score Become Important?
By Cornie Herring
Have you ever wonder why your online application for credit can be approved in 60 seconds? Or get pre-qualified auto loan for a car without asking you how much is your income? Or why your interest rates on loans are different from the interest rates of your friends or neighbors?
Your credit scoring is the factor that affect all the above. It is your responsibility to main a good credit score. You will need to use it to get you a best available rate when come to apply for credit.
What is Credit Score?
Most of time credit score is refer as FICO score (Fair Isaac Corporation), it is a number based on the information in your credit file that shows how likely you are to pay a loan back on time, the higher your score, the less risky you are. You credit score is derived from three major credit bureaus: Exprian, Equifax and TransUnion. These 3 major credit bureaus will compile your credit report based on the information provided by the companies that gave your credit in the past. Based on the information such as your payment history, the length of your credit history and the type of credit your have and the amounts owed, the credit bureaus will generate your credit report. And based on your credit report, a number or scores will be assigned to you; this number will be range from 300 to 850. This magic number is your credit score, the higher the number the better you are.
When Your Credit Score Count?
Your credit score will play an important part when comes to applying loans or other credits, it may save you a significant of interest if you are have good credit score. When you apply for mortgage, car loan, business loan or credit card, the lender or credit company will assess how risky you are as a potential borrower, the higher your score, the less risk you pose to the lender and the more likely you will get a better interest rate for application.
You will be offered at a relatively low rate if your credit score is above 700 and if your credit score is above 760, you will get the best available rates because you are the lowest risk borrower at this high of credit score. You loan will be approved with high loan rates if your credit score is below 600, and if your credit score is really bad, you may be not be able to borrow at all.
Maintain High Credit Score
Now you know how important your credit score is and when it becomes important and you can use it as a tool to save cash. Hence, it is important for you to maintain your credit score at high level. Things that you can do to increase your credit score include:
Pay your bills on time
Keep balances low on credit cards
Don't open a number of new credit cards that you don't need
Have credit cards - but manage them responsibly
In Summary
Credit score is not just a number, it is a tool that you can control and use to save cash. It will become important whenever you need credits and it is an important factor to be considered by any financial organization before they approve your credit application. Hence, keep your credit score all time high.
About the Author
Cornie Herring is the Author from http://www.StudyKiosk.com/creditbasics. "StudyKiosk-Credit Basics" is an informational website on credit basics, debt consolidation and bankruptcy.
Article Source: http://www.simplysearch4it.com/article/49269.html
| If you wish to add the above article to your website or newsletters then please include the "Article Source: http://www.simplysearch4it.com/article/49269.html" as shown above and make it hyperlinked. |
| Some other articles by Cornie Herring | Get To Know The Bankruptcy Filling Process If This Is Your Option
Filing for bankruptcy is a very personal decision. Heavy debtors may choose to file a bankruptcy if they see no other ...
Payday Loan Is High Cost Cash, Avoid It!
Payday loan is a small, short-term, high interest rate loan. It also known as cash advance loan, check advance loan, post-dated check loan, or deferred deposit check loan. It often repaid after you receive your ...
What Is Accelerated Debt Consolidation?
Are you burdened with debts? Are you finding it harder each month to meet the minimum payments for your debts? Your debts are piling up every month, creditors' calls make your ...
What Is A Lien On A Property?
When you use your home as the collateral to get a loan, your lender will have a lien on your property. What does this mean and what are the risks involve when someone ...
Consolidate Debt With Home Equity as Security
In these days, hard to find a person with zero debt and most people have more than one debt. You may have high interest credit card debts, loans and mortgages. ...
What is Student Loan Consolidation Program?
You are getting a few student loans to support your study. After the graduation, you need to start repaying these ...
|
|
| |
|
