A Look At Credit Reports And Credit Scores
A credit report is basically a consolidated account of your previous financial borrowings and repayments. Every time you borrow, pay or delay, the details are added to your credit report. Lenders use it to assess how likely you are to pay back any money lent to you.
Through your credit report you will be issued a credit score. They will compute your borrowings and repayments against the time taken to repay and come up with a score of between 300 and 850.
The higher it is, the more financially stable you are considered to be. It means that you are more likely to be offered a loan, a credit card or a mortgage. If it’s low, it means that your application for borrowing money has a high chance of being rejected.
If your credit score is over 700, you are considered to be in excellent credit health. If you are below 600, then you need to improve your credit health by paying your debts off.
Now, lets look in more detail at some of the reasons why it’s important to have a good credit score…
– Once you have a good credit score, it means easier access to more finances. This could be a store card, bank loan or a car. Today, it’s almost impossible to get a mortgage if you don’t have a good credit score.
– If your credit score is favorable, you’re considered to be a reliable person who pays back what you borrow. This encourages vendors to offer you better deals. You will likely get longer repayment periods or healthy discounts.
– When applying for a job, employers may run a credit check on you. Applicants with high credit scores are in an advantageous position, as they are considered to more reliable and honest.
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Tags: credit, credit report, credit score, debt, finance, personal finance
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