A credit score is fundamentally the life story of your finances and helps in establishing how credit worthy you are.
This score is used in the decision process of whether you qualify for credit, loans, charge cards or utilities as it serves as an indication of the likelihood of you paying your bills in the approved manner.
Your score will also be used in determining what interest rate you will be charged if credit is given and the credit limit connected with it.
Your credit report may also likely be researched by potential landlords or employers in an endeavor to decide if you are responsible with money.
By law every resident of the United States is permitted one complimentary copy of their credit score once every 12 months.
The 3 primary credit bureaus; Experian, Equifax and TransUnion each use slightly different algorithms in determining your credit score which means you will likely have different scores simultaneously at each of the bureaus. Since each bureau uses their own scoring method it becomes essential to obtain your score from each credit bureau.
The Basic Makeup of a Credit Score
The estimated breakdown of how a credit score is set is as follows:
• 35% is payment history. Your score may be lowered if you pay debts such as your automobile payment, credit cards and mortgage behind schedule. Paying your bills on time will strengthen your score in time.
• 30% is a ratio of credit utilization. This ratio represents the portion of your credit limit in use against the credit limit still available. Your credit score will increase if you pay off some debt which will decrease your utilization percentage.
• 15% credit history duration. Your credit score will increase overtime along with the age of your credit history assuming you are paying your debts on time.
• 10% goes towards the assortment of credit used. By implementing many forms of credit like installment, revolving and consumer finance you can also promote your score.
• 10% Multiple credit applications. By taking out multiple credit applications or inquiries in a short timeframe you can also adversely affect your credit score. It's ideal if you can even out your credit inquiries over time.
Credit Score Range
Credit scores range from 300 on the low side to 850 on the high side. Around 60% of scores on average are in the 650 to 799 range. History shows the median score to be 723.
Top Reasons to get Your Credit Score on a Regular Basis.
• To ready for consumer purchases to be made in the near future
• To help prepare when applying for a mortgage or to negotiate lowering your present interest payments.
• To secure the best interest rate on your next auto purchase.
• because a potential employer/landlord may likely check your score it's important you know what they may find.
• To ensure it's correct.
• To protect yourself from identity theft and or fraud.
Getting your credit score is worth taking seriously as the reasons listed above are major aspects of a person's life.
Now that the internet is so widely available acquiring your credit score has become quicker and simpler than ever. This process will help decide your credit worthiness, your credit history, your credit potential and for your protection will help guarantee the information included on your report is accurate.
Getting your credit score simply involves providing your key personal information such as; name, address, social security number and date of birth and then clicking "submit".
Considering your credit score is free and so effortless to acquire you no longer have any good reasons not to get yours today.
Click here to view your free credit score now.
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