A credit score largely influences your financial standing. Therefore, it is necessary for you to understand better what a credit score is.
Whenever you want to have a stable financial standing, it is necessary for you to have a respectable credit score. In fact, having lower credit scores actually makes your financial situation more risky and stressful. Plus, credit scores also largely influence your future financial transactions. Here then are some important facts to remember when you want to understand your credit score better, and to why you must get high credit scores.
• A credit score is different from a credit report
It is true that both your credit score and your credit report give you an indicator of the status of your financial situation, as well as whether you are creditworthy or not. However, it is also true that your credit report is not the same as your credit score. Your credit report actually gives you a listing of all your financial transactions, as well as your outstanding loans. However, your credit score actually shows your creditworthiness through a three digit number.
• A credit score describes your financial status is a more straightforward way
Your credit score, because it is numerical, is a more straightforward measure of your creditworthiness. In fact, this score tells whether you have still an outstanding loan to pay, given its amount, as compared to how promptly have you paid such dues. Basically, it is a measure of your promptness to pay your financial obligations.
• A good credit score makes you secure future financial loans easier
Whenever you have a high credit score to show, most likely, creditors would easily give you your loans, even if it is a kind of a mortgage loan. This is because of the fact that having high scores is an indicator that you are a low risk debtor, in which there are low chances that you will not pay our loan.
• A good credit score makes you pay your bills with much lower interest rates
Also, because having a high credit score makes you a low risk debtor, naturally, creditors would charge you lower interest rates for you payments. Remember that interest rates is directly related to risks; the higher the risks, the higher the interest rates to be paid.
• A good credit score usually pegs at 680 to 720
Usually, people having such high scores actually are excellent debtors, in which they usually get the best interest rate payments.
• The national average credit score is only at around 650 to 680
Unfortunately, not all consumers get such high credit scores. But having such scores still makes you a low risk debtor.
• Consumers who gets a credit score of 620 and below have to suffer paying high interest rates
These are scores that are lower than the national average; usually, they are high risk debtors, and have no choice but to go to sub prime markets where interest rates are sky high.
• Three major credit bureaus give your credit scores
Equifax, TransUnion, and Experian are the three main credit bureaus that are responsible for your credit scores.
Author Resource:
This article has been provided by http://www.free-credit-reports.com , where you can compare credit report and identity theft protection services with this comprehensive chart of all credit report and credit score service providers.
![[Valid RSS feed]](http://www.look4articles.com/images/icon_Rss.png "XML Feed For RSS"){kind=icon}
Category Rss Feed
Print This Article
Add To Favorites
![[Valid RSS feed]](http://www.look4articles.com/images/rss.jpg "XML Feed For RSS")