|
If ever there was a
modern day scarlet letter, the
credit score
has the potential to take over the
title. Of course, if your credit score
is high, then it can be your
badge of glory.
What exactly is a
credit score? It’s different from your credit
report in that it is simply a number – between 300 and
800 that rates how much of a risk you will be to
lenders.
It’s based in part
on your credit history – including everything from
previous mortgages to department store credit cards and
medical bills. Your data is compared to others in
the population, and your score is generated for lenders
to use.
The higher the
number, the better you appear as a risk. If you
score a 620 or below, you’re going to have to work
harder for a loan of any kind. If you’re lucky
enough to have a score over 660, then you’re home
free. Anything in between means you’ll have more
to prove than some, but at least you’ll be in the
running.
If you have a
lower score than you’d like, you can improve your rating
easily. First, make timely payments. Past
due or non-payments are the biggest factor in lowering
your score.
Try not to max out
all of your credit lines. Even if you make the
payments, you don’t want to appear too much in
debt. Also, keep your credit for as long as
possible – don’t keep changing companies because the
initial offers are appealing. Length of credit
starts over every time you close one account and open a
new one.
Also, bear in mind
that every time you apply for credit, it counts against
you. Don’t send off a flurry of applications every
Christmas holiday so you’ll have more cash
available.
If you have a low
credit score, it’s not the end of the world.
Circumstances change – and a lender will also be looking
at your monthly income, the purpose and amount of the
loan you want, and the length of time you’ve been on the
job.
© 2004 - All Rights Reserved. Apex Personal Loans
Store does not assume any responsibility for the
accuracy or completeness of the above article. Please
consult a financial advisor for specific advice
pertaining to your particular situation.
| 
