What Is Credit Score

Category: Finance, Credit.

Have you ever wonder why your online application for credit can be approved in 60 seconds?

Or why your interest rates on loans are different from the interest rates of your friends or neighbors? Or get pre- qualified auto loan for a car without asking you how much is your income? Your credit scoring is the factor that affect all the above. You will need to use it to get you a best available rate when come to apply for credit. It is your responsibility to main a good credit score. What is Credit Score?

You credit score is derived from three major credit bureaus: Exprian, Equifax and TransUnion. 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. 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. And based on your credit report, a number or scores will be assigned to you. 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. This number will be range from 300 to 85This magic number is your credit score, the higher the number the better you are. 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 Your Credit Score Count? When you apply for mortgage, business loan or, car loan 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 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. 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. Maintain High Credit Score. Hence, it is important for you to maintain your credit score at high level.

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. Things that you can do to increase your credit score include: Pay your bills on time. Don& #39. Keep balances low on credit cards. T open a number of new credit cards that you don& #39. Have credit cards- but manage them responsibly. T need.

In Summary. 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. Credit score is not just a number, it is a tool that you can control and use to save cash. Hence, keep your credit score all time high.

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