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03.05.2020 / Borrowing « Back to all articles

How to Better Understand Your Credit Score
Credit report and credit score

 

What is a Credit Score?

Talking about your credit score is like talking about escrow – it’s one of those financial things that comes up all the time, but it is not always easy to understand.  But your credit score is not just a mysterious number, it is vitally important to several key life decisions, and can severely hinder attempts to move forward if it is not taken care of properly.  It is worth taking a little time to understand.

A credit score is a metric that rates a person’s creditworthiness, or how likely they are to repay a loan.  It is used by banks and other institutions to determine how reliable the person is who wants to borrow money.  There are a few different ways of calculating it, but essentially it is a three-digit number between 300 and 850.  The higher the number, the better the credit, and the more likely the holder is to pay back borrowed money.  A score in the upper 600’s and into the 700’s is good, anything below 500 is not considered good and needs work to repair it.

 

Factors Affecting Your Credit Score

Your credit report looks into your financial history and uses a few factors to calculate your score.  It looks at how much money you have borrowed right now, also known as your total debt.  If you are already leveraged beyond your means with many credit cards and payments, it lowers your score, since you already have many unpaid balances. It also factors in late payments and payment history.  If you never miss a payment, that, of course, is very good and boosts your credit.  This is probably the most important factor in a credit score.  

The credit report also looks at how many “hard inquiries” have been made into your credit. That is, how many times have you had a company check your credit to determine if they can lend you money.  If you have done this too many times it raises red flags that you might be borrowing too much money.  Checking your credit score through your bank or a similar site does not constitute a hard inquiry.

 

How to Build Credit

If  your credit score looks bad, there are a few ways to repair it.  Some folks have borrowed nothing, and so have no credit score since there is no payment history to track.  In that case, a carefully managed line or two of credit can help build credit.  And debts must be paid off- the longer unpaid balances exist, the more your credit score dwindles. But nothing can take the place of making payments on time.  That’s really the most important factor in your credit score.
 

How to Better Understand Your Credit Score

What is a Credit Score?

Talking about your credit score is like talking about escrow – it’s one of those financial things that comes up all the time, but it is not always easy to understand.  But your credit score is not just a mysterious number, it is vitally important to several key life decisions, and can severely hinder attempts to move forward if it is not taken care of properly.  It is worth taking a little time to understand.

A credit score is a metric that rates a person’s creditworthiness, or how likely they are to repay a loan.  It is used by banks and other institutions to determine how reliable the person is who wants to borrow money.  There are a few different ways of calculating it, but essentially it is a three-digit number between 300 and 850.  The higher the number, the better the credit, and the more likely the holder is to pay back borrowed money.  A score in the upper 600’s and into the 700’s is good, anything below 500 is not considered good and needs work to repair it.

 

Factors Affecting Your Credit Score

Your credit report looks into your financial history and uses a few factors to calculate your score.  It looks at how much money you have borrowed right now, also known as your total debt.  If you are already leveraged beyond your means with many credit cards and payments, it lowers your score, since you already have many unpaid balances. It also factors in late payments and payment history.  If you never miss a payment, that, of course, is very good and boosts your credit.  This is probably the most important factor in a credit score.  

The credit report also looks at how many “hard inquiries” have been made into your credit. That is, how many times have you had a company check your credit to determine if they can lend you money.  If you have done this too many times it raises red flags that you might be borrowing too much money.  Checking your credit score through your bank or a similar site does not constitute a hard inquiry.

 

How to Build Credit

If  your credit score looks bad, there are a few ways to repair it.  Some folks have borrowed nothing, and so have no credit score since there is no payment history to track.  In that case, a carefully managed line or two of credit can help build credit.  And debts must be paid off- the longer unpaid balances exist, the more your credit score dwindles. But nothing can take the place of making payments on time.  That’s really the most important factor in your credit score.

 

07.02.2020 / Borrowing

5 Good Signs You Can Afford More House
Moving on Up  Buying your first house is a huge milestone, but it’s often not the “forever home”.  Most people move…

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03.05.2020 / Borrowing « Back to all articles

How to Better Understand Your Credit Score
Credit report and credit score

 

What is a Credit Score?

Talking about your credit score is like talking about escrow – it’s one of those financial things that comes up all the time, but it is not always easy to understand.  But your credit score is not just a mysterious number, it is vitally important to several key life decisions, and can severely hinder attempts to move forward if it is not taken care of properly.  It is worth taking a little time to understand.

A credit score is a metric that rates a person’s creditworthiness, or how likely they are to repay a loan.  It is used by banks and other institutions to determine how reliable the person is who wants to borrow money.  There are a few different ways of calculating it, but essentially it is a three-digit number between 300 and 850.  The higher the number, the better the credit, and the more likely the holder is to pay back borrowed money.  A score in the upper 600’s and into the 700’s is good, anything below 500 is not considered good and needs work to repair it.

 

Factors Affecting Your Credit Score

Your credit report looks into your financial history and uses a few factors to calculate your score.  It looks at how much money you have borrowed right now, also known as your total debt.  If you are already leveraged beyond your means with many credit cards and payments, it lowers your score, since you already have many unpaid balances. It also factors in late payments and payment history.  If you never miss a payment, that, of course, is very good and boosts your credit.  This is probably the most important factor in a credit score.  

The credit report also looks at how many “hard inquiries” have been made into your credit. That is, how many times have you had a company check your credit to determine if they can lend you money.  If you have done this too many times it raises red flags that you might be borrowing too much money.  Checking your credit score through your bank or a similar site does not constitute a hard inquiry.

 

How to Build Credit

If  your credit score looks bad, there are a few ways to repair it.  Some folks have borrowed nothing, and so have no credit score since there is no payment history to track.  In that case, a carefully managed line or two of credit can help build credit.  And debts must be paid off- the longer unpaid balances exist, the more your credit score dwindles. But nothing can take the place of making payments on time.  That’s really the most important factor in your credit score.
 

How to Better Understand Your Credit Score

What is a Credit Score?

Talking about your credit score is like talking about escrow – it’s one of those financial things that comes up all the time, but it is not always easy to understand.  But your credit score is not just a mysterious number, it is vitally important to several key life decisions, and can severely hinder attempts to move forward if it is not taken care of properly.  It is worth taking a little time to understand.

A credit score is a metric that rates a person’s creditworthiness, or how likely they are to repay a loan.  It is used by banks and other institutions to determine how reliable the person is who wants to borrow money.  There are a few different ways of calculating it, but essentially it is a three-digit number between 300 and 850.  The higher the number, the better the credit, and the more likely the holder is to pay back borrowed money.  A score in the upper 600’s and into the 700’s is good, anything below 500 is not considered good and needs work to repair it.

 

Factors Affecting Your Credit Score

Your credit report looks into your financial history and uses a few factors to calculate your score.  It looks at how much money you have borrowed right now, also known as your total debt.  If you are already leveraged beyond your means with many credit cards and payments, it lowers your score, since you already have many unpaid balances. It also factors in late payments and payment history.  If you never miss a payment, that, of course, is very good and boosts your credit.  This is probably the most important factor in a credit score.  

The credit report also looks at how many “hard inquiries” have been made into your credit. That is, how many times have you had a company check your credit to determine if they can lend you money.  If you have done this too many times it raises red flags that you might be borrowing too much money.  Checking your credit score through your bank or a similar site does not constitute a hard inquiry.

 

How to Build Credit

If  your credit score looks bad, there are a few ways to repair it.  Some folks have borrowed nothing, and so have no credit score since there is no payment history to track.  In that case, a carefully managed line or two of credit can help build credit.  And debts must be paid off- the longer unpaid balances exist, the more your credit score dwindles. But nothing can take the place of making payments on time.  That’s really the most important factor in your credit score.

 

Need a
Loan?

Loans from $120 to $15,000. Get funded as soon as today!

07.02.2020 / Borrowing

5 Good Signs You Can Afford More House
Moving on Up  Buying your first house is a huge milestone, but it’s often not the “forever home”.  Most people move…