If you are just out of high school you might not have come across the concept of a credit history yet. But soon, as you enter the world of adulthood, you will discover that this is a term that you should become intimately familiar with, since it will influence a lot of things that you experienced - primarily around that one unfortunate requirement: money. Knowing your credit rating and what it means can lead to paying more money to lenders than you should in the form of higher interest levels.
Your credit score is a score given to you by one of the credit agencies and it is a sign of what the risk is that you represent to creditors that want should give you a loan. There are various factors that contribute to your credit score, some of which are how timeous you make bill payments, how much credit you already have as well as other things associated with your financial history.
Your credit score itself consists of 3 figures in a range starting at around 350 points and gives an indication of how reliable you will be with regards to paying back financial loans.
Creditors will be able to get an idea of your reliability level by examining your credit score bear in mind that you already have to give them authorization to do so. Each time that somebody checks your credit score it can be logged in your credit report, and that means you actually don't want it to happen too often since too many credit rating checks in itself will raise red flags.
The ultimate way to get your credit score is to get your credit report from one of the credit reporting agencies - remember that there are three credit bureaus in America and your credit rating that they have for you might differ slightly from bureau to bureau. Your credit score could have a bearing on how much interest you will pay once you try to get a loan or open an account.
Fico scores normally start around 350 and range to about 850. If your score is above 720 you do not genuinely have much of a problem, however, if your credit score is beneath 700 then it might get rid of some warning flags to the creditors and it is something you should really do something positive about.
If your credit score is unhealthy, now is the time to take action in repairing it. The more your credit score drops, the larger the interest rates you pay will be. Remember that its not all lenders rate the credit scores similarly. Some lenders may give a greater interest rate to people below 700, whilst others only raise the interest levels for those below 650. It is important to check around and find out who will give you the most effective interest rate conceivable for your credit score.
In conclusion, you need to do everything in your power to maintain good credit. This will save you money within your future lending. Also be sure to look around and source a lot of information prior to making a decision on whom to lend with.
