KnowYour Credit Score
Know Your Credit Score
A credit score, or credit rating, is a number that lenders use to estimate risk and determine a person’s likelihood to default on a loan. The higher the score, the better. A good credit rating will not only help you qualify for a loan, but could also secure you a lower interest rate on that loan.
Your credit score is based on several aspects of your credit history: payment history, amounts owing, length of credit history, new credit, and type of credit in use. If you are looking to take out a loan, make sure that you review your credit history to ensure that it is accurate. This information can be obtained from a credit bureau such as TransUnion, Equifax, or Experian.
To improve your credit score, start with the basics and pay your bills on time. Your payment history has the greatest impact on your credit score. Also, pay off your debt instead of shuffling it around—the amount of debt you carry is the second-largest factor in your credit score. Keep in mind that items in your credit history stay there for seven years, so any negative marks will take some time to disappear.
Having a good credit rating is a valuable personal asset and offers you more financial opportunities throughout your life—make sure you take care of it!
Posted by Jasmine Lee
on December 1, 2011