| Do you remember back in school when used to | | | | on your credit report and your score will be lower as a |
| receive a letter grade as an evaluation of your work? | | | | result. |
| Well, now that you're all grown up there is another | | | | The next item that makes up your credit score is the |
| grade that you have to be concerned with. It's called | | | | amount of debt that you owe. Not only do lenders |
| your credit score, and it can have a significant impact | | | | care about the total amount that you owe, but how |
| on your financial life. | | | | much of your credit limits you have used. For example, |
| When you apply for loans, the lender wants to make | | | | if you have a credit card with a limit of $1000, credit |
| sure that you're trustworthy and will pay off the debt | | | | agencies prefer that you use only a small percentage |
| with interest. If you have a low credit score, this | | | | of this total limit. |
| indicates that you haven't had a good history of paying | | | | In addition to the above factors, the length of your |
| your debts on time and are considered a bigger risk | | | | credit history also plays a role. Likewise, the number of |
| for future loans. | | | | inquiries can also lower your score. Lenders get |
| This scale goes from 400 to 800, where 700 is | | | | nervous when many people have been checking your |
| considered a very good score that you should shoot | | | | credit score, because they get the idea that you are |
| for. There is not exactly a failing grade when it comes | | | | accumulating a huge amount of debt. |
| to credit scores. The truth is that you'll end up paying | | | | Having a low credit score is certainly not the end of |
| much higher interest rates if you have a low credit | | | | your life (though many would make it seem so). If you |
| score. In some cases, you can be turned down | | | | do end up with a low credit score, you should |
| altogether for a loan. | | | | understand that the situation is quite reversible. If you |
| There are several factors that help make up your | | | | can get a handle on your debt, your credit ratings will |
| credit score. The first component is your credit score. | | | | improve over time. |
| Have you had problems in the past with making your | | | | Improving your credit score does not happen overnight. |
| payments on time? Have you declare bankruptcy | | | | However, with some dedication in the right knowledge, |
| within the last 10 years? If so, these items will be noted | | | | you can achieve this in time. |