Your credit score represents your creditworthiness. Along with your free credit score, it determines how much lenders can give you and how much interest you should pay. It determines payments on mortgages, credit cards, loans, insurance policies, and more.
The rise and fall of your credit score depends upon how long you have had credit, how much of your available credit you are currently using, whether you have recently made any late payments, and how recently you have had any negative actions or credit applications.
Most people do not pay much attention to their credit score until the time comes of desperate need for good credit score to finance a dream home, a new car, or a credit card. After receiving a rejection letter, holders try so hard to find the “secret” to boost credit scores in just a short time. But unfortunately for them, there is no such thing. There is no “easy” way for building excellent credit scores.
While others may say that they don’t stay on top of their credit, don’t want a credit card or because they prefer to use only cash, having poor credit is still detrimental on their finances. The reasons for these are:
- Insurance quotes will be higher
- Security deposits will be higher
- Renting an affordable apartment or home may not be hard or not possible at all
- Certain government benefits may be denied
- May cause being turned down for a good jod
To put it differently, credit these days is not just about borrowing money anymore. Credit files are tools that more and more companies are using to evaluate relationships with prospective customers and employees.
Moreover, if you are not aware of what is in your credit report, you might already be a victim of identity theft and you won’t even know it. Checking the report on your free credit score regularly at CreditReport.com or at CreditSesame.com is good step in catching an identity thief.
If you want to raise your credit score, here’s a sure way to do so: Learn how the credit system works. Then you’ll know what to do to make your credit score go up or down over time.
CreditSesame and CreditReport provide services that can keep you updated on your credit score, a complete overview of your credit profile and debt situation, and – what’s more – will give you a free credit score with no credit card needed from Experian.
A great way to start improving your credit is to know the following facts about credit scores. Ignorance may cost you a great deal.
First, you can get your credit score for free. Even though report on your free credit score does not include your credit score, you can still access the report on your free credit score and credit score at CreditSesame.com and CreditReport.com.
Paying off old debts can help you lose it from your credit report faster. Credit accounts with any negative information, such as late payments or being in collection, are retained in your credit report for seven years from the date you originally started to slack off on your credit.
Cancelation of a credit card does not help. Canceling a credit card – or any revolving account for that matter – is one credit mistake commonly committed. Ridding of an account lowers your total available credit against the amount of debt you owe. When the ration between your debt and credit goes up, your credit score goes down.
You can’t get a credit card if you don’t have a good credit score. Nor can you do so if you have no credit. But you need a good credit score for a credit approval.
Checking your own credit does not lower your credit score. Inquiries on your credit file caused by credit applications are “hard inquiries”, which usually count against you whether approved or not. But however much you check your own credit score, it is considered a “soft inquiry” which does not ever harm your credit. You can check your own credit score at CreditSesame.com and CreditReport.com.
Your credit score can’t be “fixed”. The best way to improve your credit score is to know and understand what factors can affect the scoring of your credit and then deliberate about improving on them.
Settling an old debt will be costly to your credit, although it can save you money. It will cause a fall in your credit score and will reflect in your file as “settled” rather than “paid in full”, which can draw negative attention from potential creditors.
All the same, negative accounts in your credit history age and thus have less influence on your credit scores. That means it’s never too late to improve your credit score.