Personal Credit Score
Personal Credit Score
Personal Credit Score : Credit score is very important, especially if your are planning to apply for personal loan or bank loan. A score less than 500 is considered “bad” and it will be hard for you to obtain credit. scoring systems use your actual credit behavior to create a three digit number that can be used as a general indication of whether lending institutions are likely to grant you a loan or not. Lending companies base their decisions to extend credit on this scale and they look at the three digit number found on your credit report to determine whether to extend credit to you. If you have a credit score score higher than 720, then you are almost assured of being granted credit. 신불자 대출
Credit scores have been used in the United States since 1974 and they have never been introduced in Britain till the Consumer Credit Act of 1974. Credit scoring systems assign a percentage value to each component of your credit score, and lenders must adhere to the judgments or points value set out by the scoring system.
1. Payment History – up to 35%
This part of the credit-scoring system allows lending companies to determine your future credit performance based on payment data on your credit history. Default payments will lower your score higher than late payments. The more payments made late or defaulting, lower the risk you are in. In general the more recent the payment, the lower the effect. It is not advisable to wait two payments to be posted to your account if you cannot afford to commit to the payments, but will be more likely to default and damage your credit score. Phone, e-mail and regard letters are accepted as vendors and are happier to report and score your payments promptly. When your payments are made on time your credit score goes up and your credit score is weighted accordingly.
2. Credit should be used wisely – not used for purchases
Make sure you know what you are spending by using your card and avoid the “pay later” effect as much as possible. Avoid interest charges and fees and always make a balance on your credit card every month. If a credit card is too much of a temptation avoid it.If you have a good credit score, do not afford 18% APR store credit. This is a sure way to drown yourself in debt.Remember, an outstanding balance will only negatively influence your credit score and among other things negatively influence your credit rating.
3. When it matters: Keep your eye on the prize!
Making minimum payments will not get your credit score any better; your score will only drop. If you can afford to make payments in a lump sum, do it! If not, make them minutely over a period of time. It is imperative that you maintain minimum payments or your consumer credit rating will take a nosedive. Make hard payments where you can, not just the minimum. A credit score is not a reflection of your payment history, the credit score is already calculated using this information, but paying your bills on time is not visible in your credit score.
In conclusion, it is really not difficult to get a free credit report. Most companies have a 24 hour free period and you can check your credit report as often as you like without any cost. Now that you know how to improve your credit score, go out there and build credit!