| When you are told what your credit score is do you | | | | hurt by these delinquent payments. If you have credit |
| really understand what it means, how it is figured, and | | | | available and all your accounts are close to being |
| how this score will impact your financial life? We are | | | | maxed out then this will impact 30% of your score |
| going to take a look at and explain the significance of | | | | negatively. If you a new to the credit world then you |
| this score as it can impact your life in ways that you | | | | are not going to show a long history of making |
| might not have even considered. Let's first take a look | | | | payments so that will impact your score badly for at |
| at what a credit score actually is. | | | | least 25% of your credit scoring. You need to have |
| When someone uses the term credit score it is a | | | | several types of credit lines such as secure, |
| number that directly represents your credit worthiness | | | | unsecured, fixed accounts and revolving credit to have |
| according to the standards set by the credit markets. | | | | too many of either type will adversely affect 10% of |
| The higher your score on a scale from 300 to 850 the | | | | your score. |
| less risk you are to a lender. This means that when | | | | What does it mean if you have a low score for your |
| they look over your entire credit history you are less | | | | credit? It can impact you in ways you may not have |
| likely to default on your loan than someone on the | | | | even considered. For example your homeowners |
| bottom end of the scale. | | | | insurance, some companies have a cut off and if your |
| Each of the three credit bureaus has their own criteria | | | | score is to low they will not write you a policy. Your |
| for how they figure you score so your score can vary | | | | car insurance rates will also be affected by your |
| from each one. However they all look at the same | | | | score. The lower your score the higher your premiums |
| information and here is what determines your score. | | | | and your deposit will be. Even your ability to get a cell |
| Your past payment history will account for 35% of | | | | phone can be damaged by a bad credit rating. The cell |
| your score, how much outstanding debt you are | | | | phone company may either deny your application or |
| carrying will account for 30%, how long you have | | | | want a very large deposit from you. |
| established credit will count for 15%, newer credit will | | | | As you can see having good credit is a necessity in |
| weigh in for 10% and the type of credit that you have | | | | today's credit driven world. The first step to improving |
| will account for the last 10%. | | | | your credit score is to understand what it actually is, |
| What this break down means is that if you have a lot | | | | how the credit companies figure it and how a low |
| of late payments 35% of your score is going to be | | | | score can adversely affect you. |