Important Things you need to know about Credit Score
Your credit Score is a report of your current and past credit history. It reflects the status and management of finances at your end.
Some of the important things you need to know about “credit score are as follows”:
- Most of the credit score will be drawn back up to 7 past years, but if you have a record of “bankruptcy” it would be reflected in your score for 10 years at least.
- You can request for a credit score every year. In fact it is a better idea to get one, this helps you to evaluate if there is any error in your report or not.
- There are three different agencies preparing the credit score of every individual, so you can actually avail three different copies of your report. Sometimes they differ grossly from each other so you need to get the same rectified.
- Payment history is the major component of the credit report, followed by the total amount of money you owe. There are few other components too.
- It is important to keep a copy of your current credit score because whenever you apply for a loan or even a mortgage, the most important thing a lender will look into is the credit score.
- In fact, an individual with good credit score can avail loans easily and even at a lower interest rate than those with “not a healthy credit score”.
- The credit score ranges from 300 to 900, so a good score would be the one on higher side. Someone with a score of 750 to 799 will be able to avail a loan more easily than anyone with a score of 300 or so.
- In case you don’t have “good score” then there is always a scope to improve the same. For this, you can pay your bills on time, you can also pay the credit card dues before the last date and avoid using any money beyond credit limit, and rather you must keep it below the same.
A good credit score always keeps you in an advantageous position. So, maintaining the same should be one of the major financial aims, else one may face difficulty while applying for a mortgage or even an auto loan.