Everything You Need To Know About Your Credit Score

Your credit score can make or break a deal, agreement, or lease. Attempting to raise a low score, or build one in the first place, can be confusing …

Credit Score

Your credit score can make or break a deal, agreement, or lease. Attempting to raise a low score, or build one in the first place, can be confusing and difficult if you’re unexperienced. The best credit repair companies say that those who spend time early on building good credit are more likely to find financial success later.

Let’s demystify the myths about good and bad scores. We’ve compiled some of the best advice and information available about your credit so you can understand your own score.

The Good, The Bad, And The Ugly

 

You’ve heard the terms good and bad referring to scores, but what do they really mean? A good score typically falls somewhere between 700 and 749. Those with a number higher than 750 can consider their status excellent.

Most scales range from 350, the lowest possible status, to 800 as the highest.

What Is Your Credit Score?

 

Your score is comprised of a combination of qualities. These are dependent on your past and your current behavior surrounding lines of credit. You can estimate your general score by evaluating the following 5 categories:

1.        Payment history

2.        Amount of money owed

3.        Length of credit history

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4.        Credit mix

5.        New credit

These elements typically make up your final number for those lenders who use FICO to check. The FICO option is merely one of many. This means that a 750, or excellent score by FICO, may be completely different when checked by another system.

If you can estimate your general status in each of these categories, you can figure out easily how your score might be doing.

1. Payments history

This refers to whether or not you have ever missed payments on a card, and how long the payment was late.

2. Amounts owed

 

If you have money owed, or a higher utilization ratio, your score is at risk of being a bit lower due to this category.

3. Length of credit history

 

Those who have an average account age of approximately seven years tend to be those same individuals in the excellent range. The correlation is due in part to this category.

4. Credit mix

 

Diversifying your accounts and making use of many types of credit, like a home mortgage, make your chances of a higher score even better.

5. New credit

 

Applying for new accounts or lines frequently can seriously damage your score. It also hurts the average length (Number 3 on this list).

Other Impacts

 

If you ever open a joint account, that account will not receive its own joint score. But, your joint account does have the ability to change each of your individual scores. If a payment is missed on this joint account, it has the power to negatively impact both of your numbers.

Student loans are one of the biggest ways that your score can get harmed early. Not making payments on time can be devastating for young people establishing lines of credit.

How To Reverse Bad Credit

 

Having a low score can be terrifying, and can feel impossible to reverse. There are ways though to increase it so that you can live your life uninhibited by it. Some of the best credit repair companies out there offer simple improvement processes to help individuals help themselves.

There are many free options out there that allow for you to check your score. These allow for you to get a general sense of where you are and how dire your situation might be, without having to hear it from a lender who is turning you down.

Bottom Line

 

Your score may feel all encompassing, but you are more than a number. There are many ways to build, increase, or reverse your score so that you can live uninhibited by bad credit.

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