subject: The Impact Of Applying For Credit Cards On Your Credit Score [print this page] The Impact Of Applying For Credit Cards On Your Credit Score
A personal credit score is a three digit number that is obtained from an individual's credit report payment history. The scores will start at a low number of 300 and can go as high as 850 with 710 being the median number of a healthy score that will help you qualify for many loans at low interest rates. It is important as a consumer to know that the lower your credit rating the harder it will be for you to get approval for a loan or line of credit. Furthermore the lower your score is the higher the interest rate will usually be, as lenders look at customers with lower scores as presenting more risk.
In the United Kingdom, just as in most other places, your credit rating will determine how much money can be loaned to you for a mortgage or refinancing. In the UK, they use three main credit reporting bureaus, which are CallCredit, Experian and Equifax. In the United Kingdom, your payment history is responsible for 35% of your score, followed next by how much money you owe, the length of your credit history, how much new credit you have and what other types of credit you may be using.
Not only is having good credit essential to have when purchasing a home or obtaining a small business loan, they are also equally important when trying to obtain personal credit cards. You should be wary of the different credit card companies offering cards as some may initially offer you a 0% interest rate. However; a few months later, that interest rate may balloon as high as twenty to thirty per cent. There are some companies that offer instant decision credit cards that you can apply for over the internet. These companies only require that you input a minimal amount of information and, based on this and your credit report that they view, they can quickly inform you as to whether or not you qualify for one of their credit cards.
The best thing you can do, as a consumer, is to compare credit cards and the features that they offer. You may want to find out about certain available features, such as consolidating balances from other cards, whether your interest rate is fixed for the life of the card as well as how much you will pay in interest and penalty fees if for some reason your payments are late. The negative impact of not maintaining a good credit score will be the rejection of eligibility for certain loans, as well as credit cards. The best way to avoid this is by paying off any debts that you owe on time and avoiding late payments that go over thirty days because these are reported to the credit bureau and can affect your score negatively.
