Your Credit Score: How It All Adds Up

So now that my ‘credit score ratings is explained’ description has brought you here, let me commence by telling you about all the items that you can glean from this write-up. Starting using a general introductory description about what credit score ratings actually are, we will move on to what aspects establish these credit scores as well as the makes use of these credit score ratings and the question on “how to know my credit score”. Last but not the least, this credit rating scores explained post will present a credit score ratings chart. I hope that after reading my ‘credit score ratings explained’ post, you may have no far more doubts on the subject.A credit score is not the amount of purchase that you incurred with your credit card and neither does the term refer to the points that you save for every purchase that you make with the credit card. This is not the meaning of a credit score.

A Brief Introduction of Credit Scores

Your credit score is used by anyone loaning you money. Credit card companies, home equity lenders, auto loan lenders and finance companies all use a model created by Fair, Isaac and Co The San Rafael, California company that pioneered credit scoring 40 years ago and dominates the field today

This score is most often known as FICO and serves as a snapshot of your credit history.

A low score can raise the price of your loan and a very low score can mean denial of your loan completely. Fair Isaac is not very fair when it comes to sharing exactly how your score is determined. Here are the approximate percentages that determine your FICO Score.

Improve Your Credit History by Paying Off Debt

One of the best ways to improve your credit history, after making on-time payments, is getting your debt under control. Paying of your debt can help you look more attractive to financial services providers, and show your financial history in a better light. Here are some ideas for paying off your debt:

Budgeting: Create a realistic budget that can help you limit your spending, and start putting more money toward paying off your debt. Figure out how much your make – your income – and how much you spend. Some expenses will be fixed, but many others are flexible and can be cut from your budget. Take care of your needs, then work toward paying off your debt. Enjoying wants can come last.

Debt collectors: You have rights when it comes debt collection. Debt collectors shouldn’t be calling you before 8 a.m. local time, or after 9 p.m. Additionally, if they know your employer doesn’t want them to call you at work, debt collectors cannot contact you at your job. Debt collectors should not intimidate, harass, lie (one example is telling you a warrant will be issued for your arrest if you don’t pay), or use other unfair practices to collect your debt. Additionally, if you write to them (use certified mail) requesting that they stop contacting you, they must honor it. However, if the debt collector files a suit against you, court-related contact is usually made. But you can designate that it be made through your attorney.

Check Your Credit Report for Errors

Your credit score is based on information in your credit report. This means that you will need to check for errors. If a piece of erroneous, negative information remains on your report, it can lower your credit score. Don’t wait until a lender denies you credit. You should check your credit report regularly and fix errors. You are entitled to a free credit report from each of the three major bureaus every year. You can go to annualcreditreport.com and get a free copy. Check the report for duplicate accounts, fraudulent accounts and other mistakes that misrepresent your situation. Then, have them fixed. Once these errors are corrected, you should see an improvement in your credit score.

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