 |
How Credit Scoring Works
The all important credit score! It determines the amount of
loan you can get, it determines the interest rate at which you
are charged for a loan, etc. Your credit score plays an important
figure in your financial life. So what goes into making that all
important score of yours? How does it increase, how does it
decrease and what are the factors that go into its
calculation?
Your credit score is a number that reflects on the likelihood
at which you will pay back a loan. Scores range from 350 (high
risk) to 950 (low risk). Credit scores do not take into
consideration your income, how much savings you have or
demographic factors such as gender, race or nationality. Your
credit score is affected by your current debt level, your past
delinquencies, your credit history and how many times your credit
report is pulled up by various agencies. Your score considers
both positive and negative information in your credit report. For
instance, recorded late payments will lower your credit score
while a good track record of making payments on time will raise
your credit score. Timely payment of your bills is important to
ensure you maintain a good credit score. The amount of balance
you have left on your credit card, how many credit card accounts
you hold and your use of revolving credit also affect your credit
score to a great extent.
Your credit score and credit report is formed on the basis of
your credit history and you need to have at least one account
which has been open or updated in the past six months to get a
credit score. If you do not meet the minimum criteria for getting
a score, you may need to establish a credit history prior to
applying for a mortgage.
All in all, if you can pay for all your debts in a timely and
consistent manner and not take more debt than you can handle,
your credit score shouldn't be able to trouble you in life. So
take care and be wise with your finances.
Sameer S Panjwani is the CEO and Founder of ChoiceOfHomes.com - A Real
Estate Portal for Home Buying, Selling and Renting. Website
url: http://www.choiceofhomes.com
MORE RESOURCES:
Credit - Google News
|
|
|
RELATED ARTICLES
What Does Your Credit
Score Tell You?
When you apply for a loan or a mortgage, the first thing
the lender does is to check your credit score. Based on
your credit score, the lender decides the amount of finance
you are eligible for and the interest rate at which you
will be charged.
Credit Card Is Adding
The Silver Lining To Your Pocket
In the new millennium plastic money or credit cards has
rendered a new zing factor to your pocket. This has not
only made you economically more flexible but subsequently
added glamour to your financial image as well.
How Does a Creditor
Determine Whether to Grant You Credit?
Credit 101How does a creditor determine whether to grant
you credit? For many years, creditors have been using
credit scores and credit scoring systems to determine if
you'd be a good risk for a loan or credit card. More
recently, credit scores have been used to help determine
what rates you pay for insurance.
Credit Card Balance
Transfers Explained
What is a balance transfer ? A balance transfer can be
explained simply as a balance transfer! When a balance is
transferred usually from a credit card, but possible from a
bank account or loan to a credit card with a offer interest
rate (usually 0%) for a set period. It does not have to be
the entire amount.
What is a Credit
Report?
Ever wondered what is a credit report? If you've ever
applied for a credit card, a personal loan, or insurance,
there's a file about you. This file is known as your credit
report.
Credit Traps Snag
Consumers
Nearly 20 years ago I worked for a small consumer advocacy
organization in Washington, DC. Each week we received sacks
full of mail from consumers across the country requesting
our list of credit cards with low interest rates and no
annual fees.
Credit Card Dirty
Tricks
There are many of us that have been badly stung by credit
card companies that have charged exorbitant fees to use
their credit cards. Several years ago an APR of 25% to 29%
was common place which in simple terms means that if you
borrow £1,000 your interest on that money would be
£250 to £290 a year.
Student Credit Cards
101
If you're a college student, you probably already have a
credit card. If not, you may have plans to get one or more
soon.
First Major Regulatory
and Legislative Victory of 2005 for Creditors and
Consumers
Under the Fair Debt Collection Practices Act, collectors
are not allowed to disclose a consumers past due debt to
anyone other than the debtor and in some cases a spouse.
The Telephone Consumer Protection Act would have required
collectors to identify the registered name of their
business in any pre-recorded messages to consumers or
debtors.
Your Credit Rating and
How To Check It
There is a lot of confusion surrounding UK credit ratings,
credit scores, credit blacklists, credit reports, and
credit files. This guide to your credit rating aims to give
you the facts you need.
Annual Credit Report and
Free Annual Credit Report
Getting an annual credit report review has been the advice
of many financial managers as they guided their customers
to be aware of all information on credit reports. Would the
idea of a free annual credit report be good news? Consumers
are thrilled with the new federal mandate that demands the
three major national credit bureaus offer a free annual
credit report to anyone requesting copies of their personal
credit reports.
Rebuild & Keep Good
Credit Ratings by Understanding Your Credit
Cards
Secured Credit Card is similar to a prepaid credit card
since the funds you are using are actually yours and not
the issuer of the credit card. Generally people who apply
for secured credit card or prepaid credit card are people
with poor credit or unemployed.
Free Credit Reports -
How to Maintain Your Credit Profile
Maintaining your Credit ProfileEvery consumer should be
maintaining their credit profiles to ensure the highest
scores possible. To do so, you must first order your credit
reports from the three major credit bureaus: Equifax, Trans
Union, and Experian.
Useful Tips On Avoiding
Credit and Charge Card Fraud
Credit and charge card fraud costs cardholders and issuers
hundreds of millions of dollars each year. While theft is
the most obvious form of fraud, it can occur in other ways.
Which Business Credit
Cards with Reward are the Best?
Thinking of applying for a credit card with a reward
program to help you and your business? Here is a brief
guide to some of the best programs on the internet.The
Platinum Business Credit Card with rewards from American
Express is a great offer.
Check Your Credit Before
Shopping For That Home Loan
Review Your Credit Score.Nearly every bank, credit union,
and mortgage lender relies on a three digit score provided
by one of the three major credit bureaus to help them make
lending decisions.
Your Credit Card May Be
Costing More Than You Think!
Do you know what your credit card is truly costing you?
Many people assume that they do, but aren't familiar with
the hidden fees that many credit card companies are
charging. In fact, if you don't keep close tabs on your
credit card, you may end up paying hundreds of extra
dollars per year-without ever really knowing it!And if
you're trying to budget your money, those hidden fees can
add up!Let's take a look at some of the most common credit
card fees, and then talk about how you can avoid them.
Building A Credit Report
Lenders Will Love You For
Will lenders really love you for having a good credit
report score? Love is not the right word of course; lenders
are after your money, and never forget that. But the
lender's representative will love dealing with your credit
application if your credit report is good.
Commercial Collections:
Business Finance Booster Shot
Commercial collections: fixture of the new B2B cultureIf
you're in the business-to-business field, or even if you're
a consumer products business that works through third-party
distribution channels, you probably know what it's like to
check your mail anxiously each day, sifting through all the
bills for that payment that was supposed to have been in
months ago.It wasn't supposed to be like this.
Defeating Credit Card
Debt With Self Control
Credit card debt is a major social problem in some Western
countries. To rid yourself of credit card debt, it is best
to recognize the problem as both a social and individual
problem.
|
|
