What Is A Good Credit Score? What is A Bad Credit Score? How Do I Improve It?
Individuals who have good credit scores are always afforded more opportunity than those who don’t. They’re eligible for loans and other forms of credit at substantially lower interest rates. They also live with a sense of security, knowing credit is available to them if they truly need it. Their good scores serve as an assurance to creditors that they are a low credit risk and can be trusted with money. If you have a bad credit score, you can expect substantial difficulties in obtaining credit. When you do get credit, it is usually provided with extremely high interest rates that range from 30% APR and higher. Your bad score makes you a financial risk and most lenders simply want to stay away from from you.
Most people simply don’t realize the full impact of having a bad score until it is too late. Interest rates usually begin creeping up as your score goes down. These rates can have a financial impact. Higher interest means you pay more money to simply service the debt, which means less money goes to paying off the debt and to cover other household expenses. If you plan to get a loan, it is advisable that you improve your credit as much as possible. To have an idea of what a good score is, you need to understand the score range.
A credit score ranges between 300 to 850. The average credit score in the last few years has been around 650 to 670. Your goal should be to have a score above the national average. Aim for 700. With that, you will have a solid credit score and will attract better rates for loans.
If your score is around or below the national average, you should start trying to improve it today. Since the housing bubble popped, lenders have tightened their standards. Most simply won’t consider a person for a loan who doesn’t have an above average score. Fortunately, you can take steps to raise your credit score today. First, find out your score. Most don’t even know that. Secondly, don’t make matters worse. Stop going in debt. Cut up your credit cards. Finally, make your payments on time and pay down as much of your debt as you possibly can. I know for most people this can be difficult, but you just have to get creative. Look to cut household expenses that are wasteful. Most people spend more money than they should. Apply those savings to your debt. If you can, get a second job or maybe sell off some things on eBay. Downsize your junk and pay off that debt. You will not regret it.
Using credit responsibly is the only solid plan there is for improving your score. You just have to reestablish a pattern of paying your debt obligations. Beyond that, you need patience to see this through. After a few months you will notice improvements in your score as creditors report your positive payment activity to the credit agencies. Start today and you will see results sooner.
Alex Post enjoys writing about credit related issues. He also writes for the online coffeemaker blog which reviews coffee machines
Article from articlesbase.com
The fastest way to raise your credit score depends on how much you want to raise it and what your credit score is now. Some of these credit score improvement techniques include: 1) removing negative items from your credit report; 2) improving your debt to credit ratio; which is your total ratio of debt to credit. For example: If you have 000 in credit and are 00 in debt, your total debt to credit ratio is 25%. You want your debt to credit ratio to be as ‘low’ as possible. For example a credit ratio of 10% would be better than 20%. You can use subprime merchandising cards to improve your debt to credit ratio. 3) enhancing your credit profile by having a diverse amount of credit such as a home mortgage, car loan, line of credit with your bank and credit cards and subscribing/belonging to affluent publications and organizations.
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