What Your Credit Score Means To You
Your credit score is a number contained within your credit
report. The final judgment on your credit score depends on
you amount of debt and your history in repaying loans. The
amount of credit you have available to you will also be
taken into consideration when your credit score is determined.
Credit scores typically range between 300 and 850, with
something over 600 being average. If you have ever been
referred to a collection agency or defaulted on a loan, your
credit score will be adversely affected. A bankruptcy will
also lower your credit score dramatically.
The total amount of money you owe as compared to the amount of
money you earn will have a huge impact on your
credit score. Each loan you have, including your mortgage, auto
loan, credit cards, and even student loans will be
taken into account. If you pay late on a regular basis, your
credit score will drop.
If you make all or most of your payments in a timely manner,
your credit score will rise. Lenders look at your credit
score as a way to determine your credit worthiness. If your
score is low, you will likely have trouble in obtaining new
credit.
Lenders look at your income, your debt level, the amount of
credit you have available to you, and the manner in which
you make your monthly payments. By paying on time, you will keep
you credit score at an average or above average
level. If you have had credit problems, you may want to make an
effort to repair your credit and raise your credit score.
Your future and your financial stability depend to a large
extent on your credit report and your credit score. Obtain a
copy of your credit report each year to make sure the
information is accurate and that your accounts are listed
properly.
Your credit score is an important part of your life and you
should make an effort to maintain it.