What is a credit score? A credit score, also called a credit history rating, is a numerical representation of an individual’s credit risk, to reflect an individual’s creditworthiness. A credit score reflects a credit history, generally sourced from three credit agencies, most commonly the credit bureau known as Experian, Equifax, and TransUnion. The score is expressed as a percentage over a period of time. This means that one’s credit score, credit history, and payments are all factors that add to the credit score.
This credit score has long been known, but it wasn’t until recent years that it became something more than just a number. Credit scoring and analysis has become increasingly important as lenders have become increasingly willing to take a risk on people with lower credit scores. The three credit reporting agencies provide different methods of calculating the credit score, but they generally arrive at their decisions by considering the borrower’s payment habits over a period of time, the amount of credit extended to the borrower, and other such factors.
Lenders have begun to penalize borrowers for things like late payments, and even for instances in which they have declared bankruptcy. As a result, scores have begun to be lowered as well. Credit scoring isn’t perfect, and despite some flaws, it does provide a measure of risk for lenders. The goal of lenders is to give the consumer the best interest rate possible, and if you don’t have a good credit score, you won’t be able to get that good rate.
Credit score numbers will affect lenders more than ever. They’ll consider you as a whole when determining your loan requirements and the amount of money you’re going to be charged. Even landlords and apartment managers will review a prospective tenant’s score to determine whether or not they’re worthy of employment or not. That’s why it’s so important to keep up those accounts open, even if you only use half of your available credit.
But there are many ways to boost your available credit scores without incurring fees or interest rates. For example, do you pay your bills on time? Do you avoid making any purchases over a specific credit limit? These are all easy things that most consumers would be wise to work on, but unfortunately, many people simply do not make the effort to correct these problems.
If your score falls below the 850 range, you’ll know right away that you need to take steps to improve it. Your options include obtaining an unsecured credit line to start rebuilding your score, obtaining a secured credit line to add to your assets, or requesting a credit monitoring service to help ensure that you’re keeping your score from falling lower. The last option, the monthly credit monitoring service, is recommended because it helps you monitor your available credit and keep an eye on your overall creditworthiness. The monthly credit monitoring service that we recommend is TGS Financial System. Download this app now on Android or Iphone devices and manage your credit score and secure your future.