A USEFUL CREDIT SCORE

Credit Score - What Does It Mean?

A credit score is an index statistically calculated from data on your actual credit purchases and their settlements; and it is an evaluation of your creditworthiness. It is a number with three figures up to a maximum of 850 points which speaks volumes to creditors giving them an indication of the extent to which you may be relied upon to settle a loan in a timely manner. If you approach a lender for a loan with a bad credit score, your loan application could be rejected; or if they decide to give you a loan, it would be with stringent financial terms attached including a much higher rate of interest.

What Is A Favorable Credit Score?

700 points is generally considered a good and reasonable credit score, which about 60% the adult population achieves. If you have been paying your credit card balances and other bills in a timely manner on a regular basis over a long period, you should have no problems having a credit score of 700 or higher.

However, you cannot achieve a useful credit score if you are only a spendthrift unconcerned about timely settlements; or you purchase over your meager financial resources permit, your loan balances would keep snowballing and accumulating.

If you ignore calls from banks and other creditors / lenders for prompt settlement, the delayed settlements would be bad for your credit record.

Good Credit Score What Does It Get You

Having a useful credit score is a matter of settling your debts on time. Once the damage is done to your credit score, you cannot resurrect it even by settling all your dues immediately, although you may undertake more work, prune you expenses and sell some of your assets to do so.

The entries already gone to your credit record cannot be deleted or undone. In such instances, it is only after years of sustained timely settlements that you would be able to convince a lender that you are now a much-reformed person who settles promptly. In order to avoid spoiling your credit score, when you have doubts about your ability to pay the installments on an intended new loan on the due dates, you should frankly tell that to the lender, and arrange with him to get a loan outside the normal procedure that results in the automatic registration of your loan details in your credit score records.

Bad Credit History

If lending institutions refuse to lend you due to a bad credit score, the only alternative is to raise some money from your friends and relatives who are also not likely ask for interest. However, ensure that you will do nothing to prevent your going to them once again should you find yourself in a similar situation at a future date.

Do not to utilize your credit cards to the maximum approved limit. Pay the total balance and not the minimum amount at the end of each month. This would not only reduce your financial costs, but also give a favorable indication of your financial maturity to a prospective lender who would be happy to lend to a person who is conscious and careful about money management.

How Can I Increase My Credit Score?

Depending on your past performance, the Bank might increase your credit limit. But still it would be good for your credit record not to utilize beyond 25% of the approved limit at any point of time, and remember, no minimum payments, but get into the habit of always paying the full balance at the end of every month.

You could get unnecessarily victimized due to an error in your credit record detrimental to your interests. If you find any discrepancies, don’t hesitate to bring them promptly to the attention of the relevant credit agency and get them rectified.

Get A 700 Credit Score

Your constant aim should be maintaining a credit score of 700 or over, without which lenders’ doors will remain closed to you. If you are likely to slip down from this vantage position during the next year or so, check where there is wastage and excessive spending and plug them up. Curb your expenses to the barest minimum if you wish to stay good with your credit score for the future too.