What You Need To Know About Your Credit Score

ce_FICO-Score-chartMany people do not know how a credit score can affect their lives. Some information can help you take charge of your personal finances.

What Is A Credit Score?
Individuals are assigned numbers to show their capacity for repaying loans. Your credit report is the source of this score. The reports are compiled by the credit bureaus. The three major credit bureaus are Equifax, Experian, and TransUnion. As the three bureaus do not all use the same scoring method, your credit score may vary on the three reports.

The credit bureaus receive information from your creditors. Your creditors may provide information to only one credit bureau, or to all three.
Credit scores can range from 300, which is extremely poor, to 850, which is excellent.

How Your Credit Score Can Affect You
There are many ways a poor credit score can be harmful. You will learn your credit is not as good as it should be if you want to take out a loan. Whether you want a new car or house, or simply need cash, your chance of obtaining it is greatly reduced if you have a poor credit rating.

There are other ways poor credit can backfire. Poor credit can affect your ability to rent an apartment, obtain cell phone service, and even open an account at some financial institutions. Virtually any business that wants to be sure you are financially responsible can check your credit rating.

What Affects Your Credit Rating?
A common mistake that reduces a credit score is not paying bills on time. When it comes to credit, this is almost as bad as not paying the bills at all. Credit card balances, retail accounts, and mortgage payments are some examples. If you want a high credit rating, always pay your bills on time.

In some cases, a divorce can affect credit scores. This can occur if you and your spouse have joint accounts.

If you file for bankruptcy, your credit rating will be affected. While rebuilding your credit is possible, it takes years for a bankruptcy to disappear from a credit report.

A poor credit rating is not always due to irresponsibility. There can be many legitimate reasons your credit is less than perfect. Job loss, illness, and other life situations can make it impossible to pay bills on time.

You Can Improve Your Credit Score
Regardless of the reason your credit score is low, there is much you can do that will make a difference. If you are patient and motivated, you can rebuild your credit. You can have an excellent credit rating that will benefit you in the future.

An easy way to start improving your credit is with the Credit Secrets book. There is much valuable information in this book. You will find answers to all of your questions, plus tips and tools to help you reach your goals, all within the Credit Secret community.

If you have seen advertisements claiming a company can automatically improve your credit rating, do not fall for the scam. It is not possible to legally remove legitimate debts from a credit report. While errors can be fixed, debts that contain no errors must be resolved with the creditor.

Second, avoid scams where you are told you must pay a certain amount to obtain your credit reports. Whether it is a one-time offer or a subscription, this is also a scam. You can obtain your reports free of charge, and you can do it yourself.

Improve Your Rating With Long-term Success
You may have an immediate goal for which you need good credit, but you should think about your long-term goals, too. If you have not developed money-management skills, now is the time to start. From preparing and adhering to a monthly budget, to financial planning for the future, it is easier than you think.

Your income is not nearly as important as what you do with it. Individuals with low incomes and high incomes all need to manage their money effectively. Whether you have a low income, a high income, or somewhere in between, you will benefit from learning how to manage your money.

Not only can your credit score increase, so can your savings. Both of these issues will impact your financial situation in the future. Whether you want to buy a house, contribute to your children or grandchildren’s college education, or retire from your job someday, your ability to do so will be affected by your credit rating and the money you have saved.

You will see every aspect of your life is better when you are financially secure. You will have more options, more opportunities, and fewer worries. Regardless of the reason, your credit rating is poor, you can take steps to change your life and your future.

Start with the Credit Secrets book. The advice and information from the experts are easy to understand, and easy to put into action. You do not need any special knowledge to repair your credit and have a better credit score. When you think about your life and future, and how much is affected by credit, it is a step you should take today.

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