Your credit score is a numeric representation of your creditworthiness. In other words, it shows lenders how much of a risk you are. Here are some answers to some commonly-asked questions about credit scores.
What is considered a good rating?
Your rating can range from 350 to 850, and most financers agree that anything above 661 is considered prime. Keep in mind that you might have more than one score and you play a crucial role in the factors that affect it (either positively or negatively).
Why is there more than one score?
Some financial experts estimate that over 1,000 financial organizations calculate your score. You can consult several different institutions to determine credit ratings. Equifax, Experian, and TransUnion are three major credit reporting agencies that have teamed up to create VantageScore, though your FICO score is determined by Fair, Isaac, and Company. The Federal Trade Commission offers you a free report on your score every 12 months. It’s a reliable place to start if you want to know your annual credit report.
What factors affect my score?
The major factors that decide your score include your payment history, the amount of time you have had credit, your different types of credit, your total owed, and the number of recent credit inquiries. Your payment history is the most important one because lenders pay attention to your punctuality when paying bills. It is also vital to understand that lenders may be wary if you already carry a significant amount of debt, or you recently applied for credit at several places in a short period of time.
How can I improve my score?
Paying your bills on time is critical. If necessary, you may need to consolidate loans to make payments more manageable. Set up automatic payments when possible, and have a financial calendar in place as a backup. If you have bad credit, talk to a financial expert about how to start building a positive credit history, to boost your credit score.
We hope this gives you insight into what tells the tale of your credit score. If you would like to learn more about the financing options available for you at Terry Reid Mitsubishi, call us today at (866) 204-7968.