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Your Credit Score IS Important for Almost All of Your Financial Transactions

By Brian Anderson
Published: Monday, November 2nd, 2009

Didn’t you know that a good credit score advice impacts your financial transactions and affects your financial life much, much more than simply being approved for a credit card, loan, or even being granted favorable insurance premiums? A good credit score can affect your future financial life for all you know! Advancements in technology have changed our way of living, indeed. 

A credit score advice is simply a calculated number that reports your general credit standing and behavior based on your past and current credits. It is used by 90% of banks, lenders, and even insurance companies in processing their clients’ loans, insurance, and others. It defines you financially (Ilyc Glink – http://www.ehow.com/articles_4817-credit-scores.html?f=tag%3Afico) and is now an essential “measurement” tool for almost all financial transactions as well. 

Fair Isaacs Corporation (FICO) is the institution whose credit standards are widely used in the US for the purposes mentioned above. It has long been the industry standard for credit-worthiness of potential borrowers. The calculated number ranges anywhere between 300 to 850, with 300 being the poorest score and 850 being the highest and best score. These scores are essentially used before deciding on loan approvals, mortgages, insurance premiums, leases, and even renting out properties. 

A high credit score advice leads to loan approvals (i.e., car loans and business loans), home mortgage approvals, and more favorable financial assistance from lenders, lower insurance premiums, and lower interest rates in repayment schemes. It also gives you access to credit cards with very high limits and very low interest rates, as well as the best reward programs available that are easier to take advantage of.

Finally, it will be easier to get personal loans to leverage your financial investments. This increases your ability to plan for the future. 

Some tips to obtain a high credit score advice follow:

Payment History Tips:

  • Pay your bills on time. Delinquent payments and collections can have a major impact on your score.
  • If you have missed payments, get current and stay current. The longer you pay your bills on time, the better your credit score.
  • Be aware that paying off a collection account will not remove it from your credit report. It will stay on your report for seven years.
  • If you are having trouble making ends meet, contact your creditors or see a legitimate credit counselor. This won’t improve your credit score immediately, but your score will get better over time if you begin to manage your credit and pay on time.
  • If you have been managing credit for a short time, don’t open a lot of new accounts too rapidly. New accounts will lower your average account age, which will have a larger effect on your score if you don’t have a lot of other credit information; and, rapid account buildup can look risky for new credit users.  

Amounts Owed Tips (Debts):

  • Have credit cards but manage them responsibly.
  • Keep balances low on credit cards and other “revolving credit”. High outstanding debts can affect credit scores.
  • Pay off debt rather than moving it around. The most effective way to improve your credit card score in this area is by paying down your revolving credit. Owing the same amount and having fewer accounts open may lower your score.
  • Don’t close unused credit cards as a short-term strategy to raise your score.
  • Don’t open new credit cards you don’t need just to increase your available credit.

So, are you now convinced that you need a second, third, and more looks at your credit score advice?

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