Understanding Your Credit Score

by Whiteshark Media White Shark Media

Those looking for credit repair collections are probably quite overwhelmed by the process. Your credit score is really important, but difficult to understand. Everything from being approved to buy a house to the price you pay for car insurance is based on your credit score. Higher scores can make creditors more confident that you will repay your future debts as agreed. Lower scores do the opposite. Many landlords will refuse to let you lease a place to live from them because they think if you haven't paid your credit card bill, you wont pay them for rent either. In some states, it is actually legal for places of employment to check your credit score when deciding whether or not to offer you a job. Having poor credit affects your entire life, fair or not!

 

Your credit score is a number from 300 to 850, ranging from Poor to Excellent. Don't feel bad if you don't have anywhere near an 850. A FICO® Score of 850 is well above the average credit score of 704. Most consumers have credit scores that fall between 600 and 750. FICO defines the "good" range as 670 to 739.

 

In 2020, the average FICO® Score☉  in the U.S. reached 710, which is an increase of seven points from the previous year. This is probably the result of people taking out more credit cards during the pandemic. If you apply for a credit card and are approved, your score raises. If you put money on it and then pay that monthly payment each time the bill comes, your score raises even more.

 

Common factors can affect all your credit scores, and these are often split into five categories:

 

#1 Payment history: Making on-time payments on your credit accounts helps raise your scores. On the other hand, missing payments, having an account sent to credit repair collections, or filing bankruptcy will hurt your scores.

 

#2 Credit usage: How many of your accounts have balances, how much you owe on them, and the portion of your credit limit that you're using on revolving accounts all come into play here.

 

#3 Types of accounts: Also called "credit mix," this portion of your credit score considers whether you're managing both installment accounts (such as a car loan and mortgage) and revolving accounts (such as credit cards). Showing that you can manage both types of accounts responsibly generally helps your scores.

 

#4 Recent activity: This considers whether you've recently applied for or opened new accounts.

 

#5 Length of credit history: This category includes the average age of all your credit accounts, along with the age of your oldest and newest accounts. If all of your credit is new, that tells lenders you may have gotten yourself into a bad financial situation recently and need credit cards to help you keep your head above water.

 

"But I already know my credit score, and it's very low!" you may be saying. It doesn't have to be this way any longer. You have a lot of debt and it is wrecking your credit score. What can you do to fix it? First, reach out to the best credit repair company and ask what your options are. It is very possible that a credit repair program is the right next step for you.

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Created on Apr 28th 2021 04:55. Viewed 98 times.

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