Borrowers Beware – Valuing Your Credit Score

Past generations were taught to live within their means. Good advice for the day but now with so many finance choices available including loans and credit cards it is hard not to take advantage, especially when extra funds are needed. Done sensibly however, taking out a loan will not reflect badly on your credit history and can be useful when you’re in need of funds. However, there are reasons to sit and have a think before going into an overdraft or taking out a loan as these actions will become part of your credit history.

A credit score is a rating of your financial history and is held by agencies such as Equifax and Experian trực tiếp bóng đá kèo nhà cái . The score is a number between 1 and 1,000 with 1,000 being the best. The number is used by banks or other agencies when an application for a loan or credit card is made. If you have applied for one of these and were rejected, a low score is most likely the reason. You can order your credit report from Experian as people are entitled to know their score.

So, what contributes to credit score ratings? Bad scores occur when a person is loaned money but has not repaid it on time. This rule extends to credit cards, loans and even bank account overdrafts. Violators may be subject to late fees and interest rates and these actions can reflect badly on credit scores. Mobile phone contracts and any other bills that require regular payment can affect scores if they are not paid promptly as well.

It might seem like there is no escape from a bad score especially to those at university who are strapped for cash, but it is simple to keep your score clean. Firstly, try to follow grandfather’s advice – live within your means. This does not mean never get a credit card, take out an overdraft, or apply for a personal loan [http://www.barclays.co.uk/loans], but it does mean that you should know how you’re going to be able to repay it. Ironically, if credit is never used, you won’t have a credit history which will result in a low score! The key is balance and the equation is simple; if you choose to borrow, you must pay back – on time.

Even though it seems that as Americans we “have it all” and that we enjoy apparent abundance in all facets of life, many consumers are now finding that they have new and massive financial problems of a size and nature that they have never seen before. Houses are being lost, good credit is being destroyed and families and financial plans are being torn apart.

We use to be a “land of opportunity, with people flocking to our country to live the American dream but truthfully this “land of prosperity” does not paint a pretty picture anymore when you turn on the news. With the savings rate being where it is today, it is true that most Americans are living paycheck to paycheck with things like bankruptcy, poverty, excessive debt and credit card ruin looming in their mind.

What is it that we are missing? It turns out, what we all lack seems to be AN EDUCATION!!! We are rich in “buying power” but we are bankrupt in the knowledge category. We consumers lack the education needed to make the right decisions and to use our financial intelligence to get us ahead of the game.

This issue is only compounded by the fact that most people don’t seem to be aware of how uneducated they really are. Usually the need for learning comes too late and the damage to our credit or financial plan is already done. By the time that most people start to realize what they don’t know about their credit score, they have already suffered damage to their score and need to do some major “re-planning”.

Your Credit Score and Understanding your Credit Score become epically important. When it comes to the savings you find monthly by raising your credit score, people are pleasantly surprised. Imagine being “pleasantly surprised” about anything financially related these days!!

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