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Positive Credit Score - Understanding Your Credit Score
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Positive Credit Score  -  Understanding Your Credit Score

Having a Positive Credit Score is the most important thing you should strive to accomplish. So many people don’t know what a credit score is and how this affects greatly when buying a home, applying for credit card or renting an apartment.

Credit score is what lenders, landlords, and utility company use to know if you are eligible for the credit you are requesting. It is important to know also the way you used your credit in past it as a strong connection of how you will probably handle your credit in the future.

FICO (Fair Isaac and Co., Inc) is the credit score most widely used by lenders that determining your credit risk. This credit risk score represent in a numerical form your credit and debt repayment history. When people talk about credit score what they really talking about is FICO credit score. The Fair and Accurate Credit Transactions Act law (FACTA) required that this risk score is available to all consumers with their credit reports; therefore you have to pay a fee.

The three big credit Agencies are:

Experian

Equifax

TransUnion

These agencies are for Profit and provide services in storing and maintaining credit record. These records are submitted by agencies or companies who grant credit. They subscribe to the Credit Report Agencies and they allow creditors to report information on your account history.

Your credit history include the name and ID of the creditor who makes report and your credit; the day the account was opened; current balance; credit limits; monthly payment amount and payment made by you for the last 12-24 months. Other information are included.

For this matter is important that you review your credit report minimum every six to twelve months. Especially if you actively using one or more credit cards, have loans installment, etc to make sure there is no inaccurate information in your credit history.

Under The Fair and Accurate Credit Transaction Act Law (FACTA) you are entitled to a free credit report annually. The three credit Reporting Agencies set up one central web site, a toll free number, and mailing address where you can order your free annual report, also be aware that you don’t need to contact these three agencies (Experian, Equifax, TransUnion) individually for the free report.

After you received it check to be sure the information on your credit report is accurate and up to date. Also order your FICO score to find out what is your score, which 850 been the highest and 599 or below is consider high risk.

If you have a low credit score make sure that you improve it by:

  • Paying your bill on time
  • If you forget to make any payment, get updated and stay update
  • Keep your balances low on your credit card
  • Apply for credit card only when is necessary
  • Consider taking a class for budgeting
  • Review your credit report for wrong information
  • Remove negative information off your credit

Having a positive credit score will allow credit grantor to trust you or take you seriously. You will able to get better credit rate, refinance with a lower rate, and other good stuff that a bad credit don’t have.

I hope that the information given help you to better understanding what is a credit score, where to get it and how to improve it if needed.


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