A majority of consumers understand the basics related to their credit score. For example, they realize the serious implications of failing to make a payment, which results in your credit score decreasing. There are a number of complexities related to scoring that trip up the average consumer. As such, it is important to remain informed on the factors impacting your credit score, to ensure it accurately reflects your credit worthiness.
Paying your bills on time and maintaining a low outstanding balance on your credit cards are two key ways you can easily keep your credit score on track. It is also important to avoid closing older accounts unless absolutely necessary, since long-term financial relationships are viewed more favorable. In turn, avoid applying for new credit unless necessary – ideally only for purchases such as homes and cars.
Lenders use your credit report to evaluate your reliability as a loan candidate. Your credit report is a reflection of your ability to handle debt responsibly and helps banks determine if you are a desirable loan customer. A high credit score can qualify you for a lower annual percentage rate (APR) on credit card balances, mortgages and car loans. In addition, with a higher credit score, you may receive approval for special offers and promotions which can save considerable money upfront, as well as over the course of the life of a loan.
On the flip side, a bad credit report may prevent you from securing loans and can prevent you from buying a new car, receiving a credit card or even renting a home or apartment. A low credit score is viewed as an inability to manage your credit successfully, making lenders uncomfortable about trusting you with additional funds, products or services. Also, many potential employers consider your credit history before offering you a job.
You are entitled to a free copy of your credit report once a year. It is strongly advised that every consumer take advantage of this offer. Once you receive your credit report, it is important that you review it to confirm the figures are accurate. If any discrepancies appear, it is critical you act quickly to correct any and all mistakes. Errors may include any clerical errors, identity theft issues or incorrect information.
If your credit score is low or you are just unsatisfied with where it currently sits, you need to begin working on a financial rehabilitation plan. Call Score Crafters today so that we can help you evaluate the right strategies to get your credit score on the road to recovery.