Money Advice Guide

There are many misconceptions about credit scores out there. There are people who believe that they don’t have a credit score and some who think that their credit scores don’t really matter. These sorts of misconceptions can hurt your chances at jobs, good interest rates, and even your chances of getting an apartment.

The truth is, if you have a bank account and bills, then you have a credit score - and your credit score matters more than you might think. Your credit score may be called many things, including a credit risk rating, a FICO score, a credit rating, a FICO rating, or a credit risk score. All these terms refer to the same thing: the three-digit number that lets lenders get an idea of how likely you are to repay your bills.

Every time you apply for credit, apply for a job that requires you to handle money, or even apply for some more exclusive types of apartments, your credit score is checked.

In fact, your credit score can be checked by anyone with a legitimate business need to do so. Your credit score is based on your past financial responsibilities and payments, and it provides potential lenders with a quick snapshot of your current financial state and past repayment habits.

In other words, your credit score lets lenders know quickly how much of a credit risk you are. Based on this credit score, lenders decide whether to trust you financially - and give you better or worse rates when you apply for a loan. Apartment managers can use your credit score to decide whether you can be trusted to pay your rent on time. Employers can use your credit score to decide whether you can be trusted in a high-responsibility job that requires you to handle money.

The problem with credit scores is that there is quite a bit of misinformation circulating around, especially from some unscrupulous companies who claim they can help you with your credit report and credit score - for a fee, of course.

From advertisements and suspect claims, customers sometimes come away with the idea that in order to boost their credit score, they have to pay money to a company or leave credit repair in the hands of so-called “experts.” Nothing could be further from the truth! It is perfectly possible to pay down debts and boost your credit on your own, with no expensive help whatsoever.

But before you start boosting your credit score, you need to know the basics. You need to know what a credit score is, how it is developed, and why it is important to you in your everyday life.

Lenders certainly know what sort of information they can get from a credit score, but knowing this information yourself can help you better see how your everyday financial decisions impact the financial picture lenders get of you through your credit score. A few simple tips are all you need to know to understand the basic principles:

So where can you get these simple tips?

You will want to read my other article at:

http://new2credit.com/creditreportintro.htm

And then sign-up for the free ecourse at:

http://new2credit.com/creditscoretips.htm

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Levi Bloom runs New2Credit.com where you
can get info on credit cards and credit reports.
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Tags: bad credit, credit card, credit repair, credit report, credit score, debt, improve credit, loanbad credit, credit card, credit repair, credit report, credit score, debt, improve credit, loan

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Your personal credit report score largely determines the rates you can
qualify for with most types of credit. The higher your score, the
better rates you can get. To find your score, you can request it from a credit monitoring service or credit reporting agency. Most credit monitoring companies will provide it free with an introductory offer, but you will have to pay for it from a reporting agency.

With hundreds of factors determining your credit score, there are many
ways
to improve it. The follow three are the quickest ways to boost your
numbers.

1. Pay Off Short Term Debt

The less debt you have, the better your score. Actually, creditors look
at
your debt to income ratio. They also rate debt differently. So credit
cards
are seen as more negative that college loans or a mortgage.

Focus on paying off short term debt first, like credit cards. Paying
off the
other debt can come later. However, having credit cards and making
regular
payments is better than having no credit.

2. Spread Debt Around

Not only do lenders look at your general debt load, they also consider
specific accounts. Maxing out any account is seen negatively. It is
better
to spread that debt around to multiple accounts. Most advisors suggest
having no more than 30% to 50% of a line of credit in use.

Be hesitant to open a new credit card account though if you are
planning to
apply for a mortgage or car loan. Opening new accounts can also
temporarily
hurt your score.

3. Close Newer Accounts

While you are looking at your credit report, consider closing some of
your
unused, newer accounts. The more credit you have available, the less
new
credit you can get - even if you aren’t using it. However, the longer
you
have an account, the better your credit score.

One way to get around this is to close accounts, then wait a couple of
months to apply for a loan. This will give time for your credit score
to
jump back.

There are no quick fixes to credit scores. Time and good credit habits
are
the surest ways of getting to good credit standing and low rates.

Here are our recommended companies for a
free copy of
your
credit
report and other credit rating resources.

Carrie Reeder is the owner of ABC
Loan
Guide, an informational website about various types of loans.

Tags: bad credit, credit report, credit scorebad credit, credit report, credit score

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