Credit Score Is Important- How Much? Do You Know The Fact?
Hard working clerk or a businessman recently found them in a pickle
. If they thought to apply for a loan and the least expected thing happen. However, they got their loan rejected. Are you getting baffled and astonished? Wondering where those people went wrong?
Then it is better to check out the credit history this time. Even one-time delay in paying out their monthly installments it can be detrimental to their credit score and in turn helps to improve financial credit.
Do you know what a good credit score is?
If you technically take down and look on to the statistical analysis of payment history, the score shown in your credit files is your credit score or what is called FICO score. If credit score ranges from 300 to 900, credit report agencies reach this magical number and using information of your credit report itself.
Who all wants to know their credit report- potential leaders, banks, insurance, and future employees wants to know their credit score before reaching any destination. With the help of this decision, and determining the FICO score will help individual like you to calculate risk of lending money in the near future.
Bank or lender can approve your loan application despite having a low credit score. But this does sound great. For example if any of this has sanctioned a loan to you that too with a poor credit score, chances of high interest rate is also there. Rate of interest charged and credit limit that is allowed may be decided after reviewing that credit score.
Which factors influences your credit score?
It is to determine whether or not you have made your monthly payments on time and if you have missed out any payments. Also remember that this will have a negative impact on your credit score.
Bankruptcy remarks stays back on your credit report for at least ten years and it can scare away your lenders from giving you any further money.
The outstanding debts are also considered while determining the credit score. Therefore, you need to know what the status of your credit cards is. Please do know how many credit cards are having and do you keep monthly funds to keep you out of debts.
Do know what are the different accounts you are using? Do you have only credit cards or you are also having some mortgage loans? These are common determining factors when it comes to determine FICO score.
Do remember that most important factor for credit score is your payment history and you have to do maintain it well. As recession is at a rise banks and lenders are becoming particularly stringent about choosing it.
How will you implement credit score in your life?
If you want a loan then make sure that you have not escaped any of the payments. Plan your expenses and pay out all the bills as soon as it comes in your way. It is not a great idea to put off payments until the end of the month as that increases chances of default.
Improving credit score will help you to stay away from filing bankruptcy as it stays on the credit report for more than ten years.