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Credit score matters that you need to be aware of

By Janet Lacey
Published: Saturday, May 1st, 2010

When you get your credit score, the first thing that should cross your mind is how the score was derived to begin with. It is quite normal to want to know the reasoning behind the score so that you are better aware of what needs to be done in order to improve or maintain the score, depending on the actual score that you got. While knowing everything about it might not be possible, it is at least feasible to know the critical aspects so that you can try and be knowledgeable about the different things that go into making your respective scores.

Outstanding debt

The most important factor that goes into any credit score is the amount of debt that you have currently. If you are making regular payments on the debt, or if your creditors are happy with your payments, then there isn’t much that you should change or do. Just continue doing things the way they are and your debt shouldn’t affect your score more than it should. Most people panic when they think about the debt and how it might affect the score. But, the truth is that debt is often not something that is going to severely hamper your score.

Bill payments

Each and every bill that you pay regularly every month matters and you should pay them on time to avoid getting penalized. If you have noticed a sudden dip in your credit score despite not having any outstanding debt, it is probably because you forgot to make some payments. Hence, try to go back and think about all the bills that you are supposed to be paying regularly and verify if you did make the payments as intended and didn’t happen to miss out on any of them. If you did, don’t worry about it. You should be able to pay the bill with a late fee and try to get your score back on track, even if it might take a little longer.

Multiple Scores

If you are living in a bubble and not aware that there are multiple scores, then you need to wake up and learn about some of these facts. Typically, your credit score is supplied by three designated credit bureaus. Each of these bureaus will have a different score and hence, it is vital that you be aware of all three scores. Since it cannot be established as to which bureau your credit provider might use to approve loans and credit for you, you should try and maintain a good credit score with as many of them as possible.

With time, you will eventually grasp these financial strategies that you can make use of and try to get a good score. Although it might be challenging initially to have healthy practices, it is certainly possible to get better at them over time. In fact, many people have been able to significantly improve their credit score with just a little help from the professionals. Managing your own credit is very possible and something that you should give a try at least once in your life.

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