17
Dec
2010
How to Improve Credit Score
The first thing that lenders will check when you apply for credit whether a loan, mortgage, or a credit card purchase is your credit score. Thats because before they decide to lend you money, they want to know how good a risk you would be.
Lenders are business people and as business people they always consider the risks involved when they make an investment. The investment is you, of course. Or more precisely, your capacity to pay. If the risk far outweighs the investment, then naturally lenders would turn away from such a deal.
The credit score helps lenders make their decisions easier and faster. Because your credit score is the closest thing to accurate information determinative of your future credit performance, they base their decisions concerning your credit application on this three-digit number.
In short, your credit score is that thing that could make or break your credit application.
For this reason, many consumers have decided to take steps to learn how to improve credit score. Even if you already have good credit standing with your lenders, it still pays to learn more ways on how to improve credit score even further. A good credit score can help ensure that you get the most favorable interest rates. How much more if youve got close to perfect credit score?
Below are some steps to help on how to improve credit score:
Improve Your Payment History
Paying your bills on time is the first order of the day when it comes to learning how to improve credit score. Even a few delays in your payment history could take 100 points off your credit score. Thats why it is imperative that you be punctual in making your payments. Lenders value punctuality in making payments above all.
Keep Debt to a Minimum
The next step in learning how to improve credit score is to reduce your debts. Your credit score is partly calculated by comparing credit balance with your outstanding credit. If you have more credit available and lesser debts, this would positively affect your credit score. However, if you have more debts than you have credits available, this could drag down your score to the pits.
One way to keep debt to a minimum is to keep your credit card balances low. Also, dont close those unused accounts just yet because zero balance might help you on how to improve credit score. Dont open new accounts either as this could lower your credit-to-debt ratio.
Length of Your Credit History
As a general rule, short credit history could mean a low credit score. But after you learn how to improve credit score, youll find out that even if you only have three years of credit history, it would have only minimal impact on your credit score, so long as you follow the above-given advice.
10
Sep
2010
3
Sep
2010
You and Your Credit Score: What’s The Good Number?
Have you ever wondered why people get denied for loans and why other people get approved for it instantly? Have you ever wondered why some people are not accepted by some companies even though they are qualified for the job?
If you answered yes to either of these questions, then you haven’t heard about credit scores. Credit scores are an important part of today’s life. This particular three-digit number will determine whether you are likely to pay the loan you will apply for or will pay the monthly bills.
If you have a low credit score, then getting a phone line hooked up in your house can be very difficult to do. Some phone companies take a look at your credit score in order to determine if you will likely pay their monthly bills or not. Sometimes, certain jobs will require you to have a high credit score. It is a fact that people who are qualified for a certain job in a company are usually denied of the job because they have a low credit score. This is why you should consider taking all the necessary steps to have a high credit score or at least have a good credit score.
In the United States, Fair Isaac Corporation or FICO is the best known credit score model that calculates your credit score. This company calculates your credit score by using mathematical formulas. It is a calculation that is widely used by lenders, such as credit card companies and banks.
The FICO score is designed to provide information to lending companies if a particular person will likely pay their bills or not. It will also contain reports of your past loan application and if you will be delinquent in the next 2 years or the next 24 months.
There are also three credit reporting agencies existing in the United States today and uses their own methods and formula to calculate your credit score. Each calculation differs, even if it was developed by FICO, and are updated periodically that will reflect your repayment behavior. Also, lenders or creditors use whichever calculation they want to use.
The FICO score ranges from 300 to 850. By having a high or good credit score, you will be able to access low interest credit cards and also low interest loans. You will also have a higher chance of getting hired by companies that require a good credit score.
You now ask what makes a good credit score number in the FICO score.
It is a fact that having a higher credit score is good. But you also have to know what makes a good number that will guarantee you of getting approved for a credit card or a loan. In the FICO score, a good number is at around 725.660. By having this kind of score, you will have a higher chance of getting approved for that car loan, mortgage or for that credit card you have been applying for.
You can get your credit score from FICO or from the credit reporting agencies annually for free. Or, you can also get your credit score as often as you want within the year for a fee.
Always remember that by having a good credit score number, you will be able to have access to low interest loans, and credit cards. By having at least a 725.660 credit score, you will be deemed credit worthy. Make sure you have a higher credit score in order to save thousands of dollars in terms of interest rates.
27
Aug
2010