Your credit rating impacts many important financial decisions in life, such as getting a mortgage, applying for a credit card and even getting a job. Therefore, it's crucial that you understand your credit rating, what it means and how to achieve a good score. Get the answers to all your credit questions below to help you improve your financial future today.
Your credit rating can affect many of the important financial decisions in your life. It can be a factor in everything from interest rates to opening a bank account to a job application. Here are some answers to the most frequently asked credit score questions.
Most people have a credit score. A credit score is a number determined by a credit bureau that helps lenders assess how well you’ve managed your financial obligations. It’s based on your behaviors and determines eligibility for things like credit cards, home loans and more.
While there is no single formula that determines a credit score, here are some categories and their relative importance that are considered when establishing a score.
Most credit scores rank individuals on a scale from 350 – 850. The higher the score, the less you are seen as a financial risk to creditors, prospective employers and landlords.
There are a number of ways to improve and hurt your credit score. Remember these tips when it comes to dealing with your finances.
Responsibly using credit cards is an easy way to help improve your credit score. Here are a few tips to help build your overall credit score and prevent you from developing bad financial habits.
Using your card every so often keeps it active, which shows lenders that you can handle credit and ultimately helps build your score.
Even if you can’t pay them off completely, you must pay the minimum monthly payment. If possible, try to pay more than just the minimum.
Keep your credit card balances below 50 percent of the approved credit limit. Always avoid using the full amount of your available credit.
Excluding mortgage or rent, keep your monthly debt payments at less than 20 percentof your monthly income.
Well, lots of people actually. Your credit score matters if you want to:
There are three major credit bureaus that produce reports. You can receive one free report annually at www.annualcreditreport.com or by calling 1.877.322.8228.