Credit Score Basics
When it comes to a strong financial health, one of the most important factors is your credit score. Your credit score can dictate a lot of things in your life, such as whether or not you can get a loan, an apartment, or even a mobile phone contract. However for many people, their credit scores remain some vague number that they do not know too much about. To try and correct this, we thought it would be a good idea to go over some of the basics. Hopefully by the end of this you will understand not only how your credit score is determined, but how to improve it if need be.
First, you should know how to find out what your credit score is. There are several ways to go about this, but the easiest is probably to check it online. There are a few sites that can do this for you, with the notable ones being Experian and Equifax. These are credit reporting agencies who can tell you your credit score. The first report is usually free, but you will have to pay a small fee for each one after that. Some sites, like CreditExpert, offer you free credit scores at all times, but you will have to deal with some advertisements from credit card companies. Checking your score is easy once you find your way onto one of these sites, and you’ll usually just have to fill in a few questions in order to get your score.
Once you know what your score is, you want to know how it got that way. If you request a full copy of your credit file from one of these websites, it will tell you the factors that are in play in determining your score. Some things that will factor into your score is your credit card usage, your current debt level, and how responsible you are with making payments. Some of these things will have a larger impact on some people rather than others, depending on your situation. If you have a healthy score, just keep going with what you were doing, and try to keep up god financial habits. If, however, your score is low, you will want to take steps to improve.
One thing you can do to improve your score is start paying back your debt faster. Spend any extra money you have at the end of the month towards paying off debts, even if it is just a little bit. The sooner you get rid of debt, the sooner your score will go up. Another thing you can do is make sure you are making all of your payments on time. Mark them down on a calendar and make sure you have enough money budgeted to meet the payments when they are due. Lastly, look at how you are using your credit cards. You don’t want to be spending to the max of each card, and you don’t want to close down old cards. Doing simple things like this can go a long way towards improving your credit score.
Credit scores can have a large impact on your life, but they don’t have to be out of your control. A few simple steps and a better level of awareness goes a long way. The best thing you can do is educate yourself on credit scores as much as possible, and hopefully this article gets you going in the right direction. You don’t want to find out your score is low at the wrong time, so get on it now before it comes as a surprise.