Understanding Your Credit Score

There are many misconceptions about credit scores out there.  There are customers who believe that they don't have a credit score and many customers who think that their credit scores just don't really matter.  These sorts of misconceptions can hurt your chances at some jobs, at good interest rates, and even your chances of getting some apartments

Every time you apply for credit, apply for a job that requires you to handle money, or even apply for some more exclusive types of apartment living, your credit score is checked. 

In fact, your credit score can be checked by anyone with a legitimate business need to do so. Your credit score is based on your past financial responsibilities and past payments and credit, and it provides potential lenders with a quick snapshot of your current financial state and past repayment habits.

If you are going to improve your credit score, then logic has it that you must understand what your credit score is and how it works.  Without this information, you won't be able to very effectively improve your score because you won't understand how the things you do in daily life affect your score. 

The credit score is a number, usually between 300 and 850, that lets lenders know how well you are paying off your debts and how much of a credit risk you are. 

Once you have your credit report and your credit score, you will be able to tell where you stand and where many of your problems lie.  If you have a poor score, try to see in your credit report what could be causing the problem:

• Do you have too much debt? 
• Too many unpaid bills? 
• Have you recently faced a major financial upset such as a bankruptcy? 
• Have you simply not had credit long enough to establish good credit?
• Have you defaulted on a loan, failed to pay taxes, or recently been reported to a collection agency?