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How Important is it to Have a Good Credit Score?

By Derek Brown
Published: Wednesday, January 19th, 2011

When we talk of loans, mortgages and credit card applications, the credit score has is always one of the most checked on factor. The credit score is the three-digit score designated by credit bureaus to consumers that serve as the determining factor of their creditworthiness. While you are not totally denied of a loan or a credit card, your chances of getting low interest rates would be so thin. It is the same thing when you have to apply for a loan or mortgage, you can get approved but with interest rates which are real high. There is no standard figure when it comes to what a good credit score is. Credit bureaus have different standard on what a good credit score is. Check this out with your credit bureau so you would know how much you still have to work on.

When your credit score turns bad, don’t despair. It’s not yet the end of the world. There are some fixes but just be reminded that the process needs a great deal of patience. When you rush the fix, it might only lead to a greater trouble.

You’re not alone with this kind of battle, there are other millions more who are on the same boat as you and once you’ve fixed it, try not to blemish your credit score again for it will take you time again to fix it.

Before you get started with the fix, you should first know what your score is. You can ask a copy for free from some credit bureaus. Make it a habit to check on your credit report as well so you would know what’s affecting your credit score.

As much as possible, limit your purchases. A recommended percentage is 30% of your credit limit and of course should always be paid in full every end of the month. If you are planning to dump your oldest credit card then better not. The best way to impress a lender is to present them a good standing and long credit history. While old cards still are reflected on your credit report, they would not put so much weight on your credit score. So as much as possible, try to use your oldest card once in a while for small purchases and make sure not to leave any balance at the end of the month. This simple formula can give a boost to your credit score.

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