Credit Score - Your Questions Answered
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Credit Score  -  Your Questions Answered

It is important to have a good credit score. This is why it is quite unfortunate that a few people truly understand what a credit score is. It is actually a numerical value between 300 and 850. The higher the score, the better. It is computed using values provided by the three major credit bureaus, namely, Equifax, Experian and TransUnion. It is difficult to obtain a perfect score. In fact, only 0.5 percent of the population has a score of 850. It is not really necessary to have a perfect score. If you have a score of 760 or above then you are in good standing already and you will already experience the same benefits that individuals with perfects scores are experiencing.

What's a good score?

There really is no definite answer to this question. The most useful and practical definition of a good score is one that allows an individual to have solid financing, get a credit card or obtain a loan without a high interest rate. Most financial institutions favor individuals with scores of 120 and above. If you have a score of a few notches below 120 though then that should not be a cause for worry. There are no hard rules when it comes to credit scores and many financial institutions are very flexible. Of course, it is another story if your credit score is in the line of 600 already.

Why is it important to have a good credit score?

Having a good credit score is important for many different reasons. For one, most credit card companies require an applicant to have a good credit score before they give him or her a card. If you have a low credit score, then you may limited to getting only a secured credit card. This means your credit limit will be based on the amount of your savings on the issuing bank. It will also be hard for you to get a loan with a good interest rate if you have a poor credit score. If you have a bad credit score and you want to get a loan, you will be making yourself vulnerable to predatory rates.

How can I raise my credit score?

If you want to improve your credit score then you should know that it can't be done overnight. After all, it also took some time for it to become what it is today. The first thing that you should do is to accept full responsibility for your financial situation. The important thing is that you start. And there is no better time to start improving your credit score than now. You can start with simple things. First of all, you should commit to never be late again in paying off your financial obligations. Also, if you have a credit card then you should make sure that you are not maxing it out. When it comes to improving credit score, the bottom line is that you should be more responsible financially.


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