A credit score is the number representative of your creditworthiness according to your credit history. It judges your character as a borrower by systematically checking on how you manage credit. The data gathered and analyzed include the types of loans you have taken up, your repayment habits as well as settlement patterns.
Credit report scores of 700 or more will give you reason to be happy because you should not encounter any problem in getting a loan at low interest rates and at a convenient payment period. Those who get below 700 are in danger of having their loans rejected outright. If considered at all, the loan approved will be lower the amount applied for, at a higher interest rate or payable at a much shorter time.
A lender will go through your credit record with a fine-toothed comb. He will try to determine whether you have defaulted payments, have experienced asset foreclosures or worse have filed bankruptcy. He will also be very interested on your total debts including those related to the use of credit cards.
Your credit report score will consider how long you have been availing of credits. Missed payments as well as attempts to open several accounts at the same time are not viewed very kindly by lenders. On the other hand, recent opening of a new credit card is viewed more favorably.
It is time to take action if your report score falls below 700. However, this is not so simple, especially if you are really tight on cash. Nevertheless, sacrificing some of the luxuries you are inclined to buy and trying to pay bills on time will do a lot of good. Better still, you can request your creditors to take your transactions off the books for a while to give you time to make repairs. Moreover, do not forget that there are credit counselors who can help sort out your financial woes. Do not ever think of filing for bankruptcy however desperate you might be. With it, lenders will avoid you like the plague.
Credit bureaus are not infallible. They make mistakes like everybody else, so if you see errors in your credit report contact them immediately and present relevant evidence of their mistake. The agency is bound to make an inquiry about your complaint. Your creditor will be given time to study the bureau’s findings. If they are not able to find fault in the revised report then they have no choice, but accept it as fact.
There are three credit bureaus, also known as credit reporting agencies, specializing in credit report scores. You can get your annual report from Equifax, Experian or TransUnion.