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How important is the credit score in the world today?

By Janet Lacey
Published: Friday, May 21st, 2010

Money runs the world; there are no second thoughts about it. So then, how does your money work for you? If you are confused about how to spend money wisely and in a way that is going to benefit your finances, then you need to learn more about the concept of a credit score. There is more to this than just a number, which is what most people think of it to be. If you completely understand the concept, then there is no saying what you can do with it and how you can use it for your advantage.

Having a good credit score is what everyone dreams about. There are so many benefits to having a stellar score. Some of the benefits includes being able to get loans approved in a jiffy and at extremely low interest rates as well as being able to buy what you want without having to endure repeated financial checks. But, the key is to not get carried away and damage your score, but to try and maintain it at a high value. In fact, if you have noticed, it is people with the top score who stay at the top and seldom come down.

Hence, you need to learn how to have a reputable credit score and then work on maintaining it that way. There are a number of ways in which you can do that. You can begin by doing something as simple as paying all your bills on time. The impact of something so small is so significant that it can alone push your score by quite a big margin. Also, don’t default on payments and any money that you might owe to the bank. Defaulting on your payments is a big no-no as it is considered to be extremely bad for your credit history.

If you have a habit of borrowing money every now and then, you should also cultivate the habit of paying them back on time. The combined advantage of the two of them can help you significantly in being successful in life. Many people attempt to borrow from one place to clear debt in the other place. If this is to avoid a negative impact on your credit score, it is fine. However, if it is something that is going to end becoming a problem, you better watch out. Eventually, you will get to a point when you won’t be able to borrow from anywhere.

Also, keep in mind that only certain transactions count towards your credit score. If you happen to pay cash and buy a newspaper from a newspaper stand, that will not affect your score. Transactions made using your credit card and other official transactions all account to your score. As long as you keep track of this and don’t exceed your limits, you should be fine and not have anything to worry about. Don’t take your score for granted, as it does matter, in quite a significant way. When you take care to keep your score high, nothing else financially should be of concern to you.

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