What Credit Scores Affect

You have probably heard the term ‘credit score’ many, many times. But do you truly understand what your credit score is and what it actually affects? If you do not, you could be doing some serious damage to your financial reputation and not even realize it. In fact, many consider your credit score to be one of the most important numbers in your life, with only your social security number as a rival. Here is the low down on your credit score and how it can affect your life:

What exactly is your credit score?

Your credit score is a number that shows up on your credit report. It is basically a summary of everything on your credit report in one simple number. This number holds a lot of power. First off, your credit score is a three-digit number between 300 and 850. Simply put, the higher the number – the better the score. Your score basically lets lenders know how much of a risk you are going to be if they give you a loan or extend credit to you in any way. A high score means they will probably get their money back with no issues. On the other hand, a low number means that the lender may or may not get their money back; therefore, it is a gamble for the lender to loan you money.

How is your credit score computed?

There are many factors that determine your credit score. One of the main factors is whether or not you make your payments on time. There are many different kinds of payments reported to your credit report, not just credit cards. You need to make sure to pay your utility bills, mortgage payment, and even cell phone bill on time otherwise your credit score will suffer. Even if you can only afford the minimum payment on a credit card, that is better than nothing.

Next, the amount of debt that you carry is evaluated. Oftentimes, it is not just the amount of debt but the debt-to-credit ratio that is considered. In other words, what is the percentage of debt you actually have versus the amount of credit available to you? If you can keep your debt below 25-35% of your total credit limit, that is considered good.

The length of your accounts can also impact your credit score. If all of your accounts are new, you will not have a very good credit score. However, as time goes on, you can prove your worthiness and your score will increase.
The type of credit you carry can also make a difference. If all you have is a number of credit cards, that is not a good sign. However, installment loans can help your credit, such as a car loan or mortgage. Basically, lenders are looking for a variety of credit.
Finally, your credit score can also be affected by the amount of inquiries and new credit accounts you have. If you are always trying to get new lines of credit this is shown negatively in your total credit score.

What does your credit score affect?

Now that you understand what a credit score is, you can easily see how this can impact your life. The strength of your credit score can literally impact every aspect of your life. For starters, you probably know that the higher your credit score, the lower interest you will pay. This is true for mortgages, car loans, and credit cards. If you can maintain a high credit score you can borrow money for a lot less money in interest. In the case of a mortgage, this means you will be able to afford a nicer house. If you are renting instead, you may not get approval if you have less than perfect credit.

So what credit score will get you low rates? Every lender uses a slightly different scale, but in general a credit score above 720 will get you the best rates. A credit score between 675 and 719 will get you decent rates. If your credit score is between 620 and 675, you will have to pay a little more but you should still be able to get approved for most loans. If your credit score is below 620 you will either not qualify for the loan or credit card you are requesting for or you will end up paying a ridiculous amount in interest.
Your credit score can also impact how much you pay for many other things, such as your insurance premium or utilities.

Of course, your utility rates will be the same no matter what your credit score is, but if you have a low credit score you will have to pay a much higher deposit to get them set-up than your good-credit-score counterpart. As for the insurance, most people do not realize that their credit score is considered when computing premium rates. It may not be fair, but this is based on statistics. Most insurance companies have found that people with low credit have 40% more claims. So for the insurance companies, these people should pay a higher premium since they are more likely to require their services. Every insurance company weighs the credit score differently, so if your credit is less than perfect it may be worth it to shop around to get the best rate.

Finally, whether or not you get a job can be determined by your credit score. Almost every employer out there runs a background check, which includes a credit score, before hiring you. This credit score is looked at by employers to see how responsible you are. If you are good at paying your bills, then you are probably going to be an ideal employee. Contrarily, if you have a low credit score, you may not be very good at managing money, so should you be trusted with theirs?

As you can see, your credit score can make a big difference in your life. With a good credit score the world is your oyster. You can live wherever you want, buy whatever you want, and work wherever you want. Not to mention you will pay less money while doing it.

The operator of this website is not a lender.
This site will share the form information provided by the consumer with one or more lenders.
This site can connect you with a cash advance lender based on your form and lender requirements.
Not all customers will be connected with a lender, and not all forms will be approved by a lender.
PaydayLoansCashAdvance cannot guarantee the amount of funds that may be extended if a lender approves the form.
*Not all lenders can provide up to $1,000. Consumer loan amounts vary bases on creditworthiness.
Lenders tend to provide upper range loan amounts to returning customers. Cash transfer time may vary between lenders.
Funds are not available until the next business day. Cash advances are not available in all states.
Lenders may undertake credit checks or otherwise verify the consumer’s social security number or other information.
If and when lenders preform credit checks they are ran via specialized credit bureaus.
Late payments of loans may result in additional fees or collection activities, or both.
Non-payment of credit could result in collection activities.
Each Lender has their own terms and conditions, please review their policies for further information.
Every Lender has its own renewal policy, which may differ from Lender to Lender. Please review your Lender's renewal policy.

Please refer to our Privacy Policy for important information on the use of cookies.
By continuing to use this website, you agree to the Notices and Disclosures and the Privacy Policy.

Copyright © 2014 PaydayLoansCashAdvance.com. All rights reserved.
3172 North Rainbow Boulevard #1212 Las Vegas NV 89108