House, car, credit card, your FICO score is what creditors use to determine whether or not they are going to grant you credit…90% of of them to be exact. So what actually is your FICO score? These days, there are a...
Part 1 Perhaps deadbeat is a little too strong. But “The Odyssey of a Nominally Responsible and Hardworking Person Who Found Himself In A Difficult Financial Position Due to Circumstances Largely Out of His Control” is a bit of a mouthful,...
Hi I’m back. If you’re with me so far you’ll know I consider myself a largely responsible person who happened to find himself financially stuck midway through life’s journey. I basically had a simple choice, continue to be credit poor paying...
A credit report is a detailed history of your credit, what debts you owe and how reliable you are when paying back lenders. Your credit report includes your name, address, date of birth, your previous residences, and your Social Security Number, as well as any credit accounts you currently have open, closed credit accounts from your past, accounts in collection and more. Think of it as your financial report card.
What is my credit score and why is it important?
Your credit score quantifies the information in your credit report. This allows lenders to set a standard for loan approvals and quickly assess an applicant’s credit standing.
Not all lenders calculate credit scores the same way, and depending on the scoring model used your score can vary. However, most scoring models are very similar, so by looking at one credit score, you’ll get a general idea of what your score will be using another scoring method.
When you apply for a loan or a credit card, lenders will look at your credit score to determine your creditworthiness. If you have a high credit score, this suggests to lenders that you’ve been responsible about repaying debts on time and are likely to repay them as well. If your score is too low, lenders may increase your interest rate or deny you credit all together.
Who looks at my credit?
If you are applying for a loan or a line of credit, lenders may look at your report to determine creditworthiness, and calculate the interest rate you are eligible you are for.
Additionally, it is not uncommon for landlords to look at your credit to determine whether you will be a responsible tenant, and utility providers may require a credit check to make sure you will pay for services promptly. Employers will sometimes look at potential employees’ credit to get a better understanding of how responsible they are. While these are the most common situations, there are others. These days it seems your credit is used for almost everything.
Is credit repair worth it?
Your credit is essentially your financial reputation and because it is used for so much, credit repair services is absolutely worth considering if yours is bad. Often times lenders require a score of 600 or more in order to get a loan, and the better your credit is from there, the lower your interest rate will be (meaning you can save hundreds or thousands over the life of your loan).
It doesn’t take much to hurt your credit score, so working with someone to understand how to care for your credit is also a helpful tool to those who are just getting started using credit, or those who are trying to build it back up after a few mistakes.
With credit, it's never too late to change your habits and your score. Your credit history goes back 7-10 years, which often feels like a long time, but the sooner you start making good credit choices, the sooner you'll start seeing your score increase.