Your Credit Score Could Make or Break You
Your credit score can have a big impact on your life. That score determines whether or not you can buy that new car, be approved for that loan or hired by that new company. Anytime you’re speaking to a bank or lender about a loan, they will be pulling your credit history and score.
Any time you request a loan or apply for a credit card, your credit score will be pulled. Lenders look at your credit score to determine whether you are a high or low risk lendee. If your score is high, you’ll be approved – if it’s low, then your loan will be rejected. The higher your credit score, the lower your interest rate should be as well.
Your credit score is determined by each of the big national credit reporting agencies. You may recognize the names TransUnion, Experian, etc. – these are the bureaus that hold your credit history in hand. Since there are three, that technically means you have three distinct credit scores.
These agencies determine your credit score by examining a variety of factors about your credit history. Debt to income ratio and credit availability are the big factors. Late or missed payments, bankruptcy claims, disputed debt and more also factor into your credit score.
Taking all this information into account, the big bureaus then assign you a credit score – which is really like a grade. The highest you can hope for is 990, but consumers with perfect scores are hard to come by. In fact, not every agency’s credit score measurement is as high as 990. Some stop around 850.
Typically, a good credit score is anything over 700. A score of 700 or more will get you approved for most practical loans, and net you a decent interest rate as well. The higher your credit score, the better interest rate you are likely to get.
Your credit score paints a picture of you as a consumer to any company pulling it. It gives them an idea of how responsible you are with your money and paying debts. It even gives them an idea of how early on you began building up your credit, or if you haven’t at all! You may even have to allow potential employers to pull your credit score and history nowadays.
Staying informed of your credit score and report is important given the major effects it can have on your life. There are plenty of free services to use, if you do your research and find the ones that are truly free. No matter what, you should pull your credit report and score at least once a year, to make sure there are no mistaken issues in it. This will ensure there are no surprises waiting when it’s time for you to get that new car or home.