What is a Credit Score?
A credit score is a digit number assigned to a person that lenders utilized to determine and evaluate what risk is associated with lending someone money and is typically needed before opening up a new line of credit, auto loan, mortgage or any other type of loan and will range between 300 through 850. The higher the score, the better credit you have.
Typically, a good score is considered to be around 720 or higher and you could save hundreds or even thousands of dollars based on the interest rate you qualify for.
There are several factors that go into determining a credit score.
The Biggest Factors Are…
- Owing large sums of money on credit accounts will typically lower your score.
- Submitting payments on time and paying up loans Yield a higher score.
- Opening up several new credit lines in a short period of time could lower your score.
A credit score will determine how long your credit lines have been opened from your oldest account to most recent. This evaluates the type of credit you have having a well-rounded history of credit is good, but do not open accounts you do not intend to use.
If you are unsatisfied with your score, know that it will change over time. For example making any payment on a credit card or paying off a car will affect your score.
There are three credit bureaus: Equifax, Transunion and Experian, which will provide you all the credit, work, and living address history they have on you when your score is requested.
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