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Credit Score News, Tips & Advice « Credit Scores > Credit Score Advice > Creditors and Debtors: a love hate relationship

Creditors and Debtors: a love hate relationship

By Brian Anderson
Published: Sunday, November 22nd, 2009

We all had a similar experience at one point in our lives; we lend money to a friend and expect them to pay it back by the time you need them, and then when that time comes, all agreements between you and your friend have diminished into nothing but thin air. Annoyance, irritation and nuisance are all but sheer euphemisms to describe how anybody would feel at this circumstance. If this friend would ask for credit score advice from me, I’d hit him with a smack zero

 Benjamin Franklin couldn’t have said it any better when he said that creditors have a better memory than debtors. And now you know why banks seem to have photographic memory on all people who try to file for loans. If you take the bank as a long time friend, you would understand why he would be a little uneasy lending you some cash when you still have a lot of other unpaid debts. To the bank, this is what you call your credit score, and here are some credit score advice.

First of all, a credit score is a score based on a statistical analysis of a person’s credit files, to represent your eligibility for borrowing money. This score can vary from place to place but wherever you go, if you’re dealing with credit, it’s a small world out there and news spread fast. If you thought that women were the best gossipers, you are quite wrong; it’s actually lenders such as banks and credit card companies. They gossip around with each other through a code known as the FICO scoring system.

Now don’t get bummed out just yet. We all get different credit scores and it’s just a matter of how to speak that language in order to gain an understanding of it. Here are some credit score advice for you before we begin, remember to never bite off more than you can chew. If you can’t pay it back within the allotted time, never say that you can.

The FICO scoring system is a scoring system that ranks people from 1 to 10. Taking into account different variables, such as histories of bankruptcies, past loans, mortgages, the number of credit accounts you have, how old these are and many more. Now these do not give you your score alone because your borrowing characteristics will also be compared with others similar to you and will sort of average you out. This is to make sure that individuals won’t take the blame for a company’s mishaps.

A good credit score advice is to monitor your taxes in your company and make sure that they are being remitted to their respective government offices. There are many cases where an individual is penalized for the mistakes of his or her own company. Luckily the credit scoring system takes this into account through its averaging system. But no system is perfect and if you want to make sure that your credit score will not drop, do a regular check. Remember that tax evasion is not only a credit score blot, it is also a crime.

These are some of the credit score advice that you can start out with and which are most important. Just remember to never bite off more than you can chew for you will surely choke.

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