Times are tough. The fact that banks are lending less and less is credit challenge. As a real estate agent, I have seen some interesting times. Many people have fell prey to credit scams. Since knowledge is power; I wanted to help people get better Understanding of their Credit Score.
Credit scores range from a low score with the 300’s to a high score over 800. Lenders use this snapshot of your credit history to assess your credit worthiness. Your credit scores are considered for the likelihood that you will pay your bills and repay outstanding loans.
Credit scores are derived from your credit report. You credit report is a detailed record of your credit history that lists how you have paid your bills and managed your credit over the years. Here are three Credit score tips.
Why Does Your Credit Score Matters
The higher your score, the more likely it is your credit request will be approved. Your credit score will also influence the amount of credit you will be granted. The interest rate the lender will charge you is also a factor considered based upon your credit score. The bottom line is whenever you borrow money, your credit score is considered.
Outside of shopping for credit to get lower rates, credit scores impact in other ways. Landlords, review credit scores with tenants. The insurance industry uses a credit-based insurance risk score to determine whether to provide insurance and how much of a premium to charge. Many jobs seek to review credit scores before hiring employees.
What are the Types of Credit Scores
The popular & most widely used credit scoring systems is the FICO score. Credit reporting agencies, the companies that compile consumer credit reports, provide credit scores to lenders and consumers. Each of the three national credit reporting agencies sells FICO scores to lenders under different brand names.
The three credit reporting agencies also have developed their own joint scoring model, called VantageScore.
This score uses a different scoring range than FICO and assigns a “report card” grade of A,B, C, D, or F. VantageScore is not in wide use among lenders.Credit scores are based on information the credit reporting agencies collect about you. This information comes from creditors, who report things such as your payment behavior, your balance and your credit limit. It also comes from public records, which reveal if you have filed for bankruptcy, owe money as the result of a legal judgment against you or owe past due taxes
What can you do to improve your Credit Scores
Here are a few tips that can help you improve or keep your scores higher:
1) Never take your balance above 30%. If you have a 10,000 credit limit, keep your balance at about 3000 or less. It is tempting to max it out, but you should always keep a lower balance.
2) The bills on time and get consistent. When you show a consistent 12 month or more history, you get a better chance of getting good credit
3) If you have no credit get a prepaid credit card. It serves two purposes. You are able to build your credit history and create a savings plan. As you make payments on time, at the end of the cycle they company will most likely release the funds as a saving account to you.
4) Be cognoscente of your credit report. Get a copy of the free report at least every year. Pay attention to what is on it and dispute the in accuracies.
I hope these tips helped. I pray you get the best credit you can to get the best deal in life.