What Your Credit Score Means?
We’ve all heard about the daunting measurement of responsibility- the credit score. Fear of damaging your credit score can cause you to lose sleep and stop you from doing things that may actually help your credit. Here’s a basic guide to understanding what your credit score means.
Attorney Mike Ziegler Explains Your Credit Score
Your credit score is a number that can range from 350-850. It’s important to know that different sources will use different types of credit scores. Sometimes this can affect the measurement of your score. Make sure that you use the same type of scale each time you check your credit score.
The FICO score is the one most commonly used by credit lenders, so this is a good place to start. The higher your credit score is, the lower the risk associated with lending you money is, according to creditors. If you have a low credit score, you are considered high risk.
There are several factors taken into consideration when determining your credit score. These all are measured at different levels to determine your overall score. They are;
Payment History: This includes your payment history. It covers your consistency in payments, amounts, and delinquencies. It counts heavily on your score.
Amounts Owed: This is your outstanding balances and is also a large factor in determining your score. This also includes any current allowed credits you have available from lenders.
History: How long you’ve had active credit and the time between account activity.
Types of Credit: What your current loans and owed credits are, and your past credit accounts, are taken into consideration.
Inquiries and new credit: Your attempts to receive additional credit weighs in on your credit score.
Generally, you want to aim to be at least in the 700 range. This keeps you at a low risk for lenders, meaning that you are considered to have good credit. If your credit score is very high, you will be privy to much better services and loans.
If your credit score is low, you can be denied credit. This can limit your ability to purchase items that require credit. You can be denied for credit cards, loans and services. A poor credit score can even affect your ability to be hired for certain jobs.
There are many reasons your credit score could be affected. In many cases, a lack of credit can be just as damaging as poor credit. If you are in debt and are receiving calls from a debt collection company, call the Law Office of Michael A. Ziegler and let Mike Ziegler help you resolve the issue.
Source: Credit Score