Your credit score is an important factor in determining the interest rate you will pay when borrowing money to purchase a home, car, or any other item.
In general, the higher your score, the lower will be your interest rate.
Therefore, having a higher score will actually help improve your net worth.
It is calculated using a statistical model and reported on a FICO (Fair and Isaac Corporation) scale.
Thecredit agencies use your "FICO score" to predict the likelihood that you will repay your debts.
Your FICO score is given on a credit report that banks, credit card companies, insurance companies, and many other agencies use to help them decide whether they will lend money to you or offer you their services.
Some of the factors used to determine your credit (FICO) score are: Payment History Length of Credit History Amount of outstanding debt Recent inquiries on your credit report Types of credit in use Some of the factors that are NOT taken into consideration are: Age Race or ethnicity Income Job Marital status Education The three credit reporting agencies in the US are Experian, Equifax, and TransUnion.
They each use their own formula to calculate your credit score; so each agency will give you slightly different scores.
Your personal credit report not only contains your credit score, but it also contains all of your current outstanding debt.
It will list if you have had any late payments, what the balance is, and much more.
Its important for you to know what's on your credit report.
In fact, it is VERY possible that there are errors on your credit report.
These errors require your immediate attention.
Fixing these errors can often be very simple and could very well improve your it.
In addition, there may be old credit cards that you had forgotten about, that you may want to have closed.
Reducing the amount of debt you have "available" could also increase your credit score.
So, by simply reviewing your own credit report, fixing errors, and cleaning up old debts, you may be able to improve it immediately!Even a small increase in your credit score could translate into significant savings for you next time you get a loan or credit card because your interest rate will be lower!
In general, the higher your score, the lower will be your interest rate.
Therefore, having a higher score will actually help improve your net worth.
It is calculated using a statistical model and reported on a FICO (Fair and Isaac Corporation) scale.
Thecredit agencies use your "FICO score" to predict the likelihood that you will repay your debts.
Your FICO score is given on a credit report that banks, credit card companies, insurance companies, and many other agencies use to help them decide whether they will lend money to you or offer you their services.
Some of the factors used to determine your credit (FICO) score are: Payment History Length of Credit History Amount of outstanding debt Recent inquiries on your credit report Types of credit in use Some of the factors that are NOT taken into consideration are: Age Race or ethnicity Income Job Marital status Education The three credit reporting agencies in the US are Experian, Equifax, and TransUnion.
They each use their own formula to calculate your credit score; so each agency will give you slightly different scores.
Your personal credit report not only contains your credit score, but it also contains all of your current outstanding debt.
It will list if you have had any late payments, what the balance is, and much more.
Its important for you to know what's on your credit report.
In fact, it is VERY possible that there are errors on your credit report.
These errors require your immediate attention.
Fixing these errors can often be very simple and could very well improve your it.
In addition, there may be old credit cards that you had forgotten about, that you may want to have closed.
Reducing the amount of debt you have "available" could also increase your credit score.
So, by simply reviewing your own credit report, fixing errors, and cleaning up old debts, you may be able to improve it immediately!Even a small increase in your credit score could translate into significant savings for you next time you get a loan or credit card because your interest rate will be lower!