Credit and All You Need to Know About It
Your credit score is one of the essential details of your financial standing that you have to ensure is in top form. It will determine the possibility of you successfully securing loans, credit card products, bank accounts, and other financial services from lenders.
It is almost impossible to conduct even the simplest of business transactions without your credit score comes into play these days. Hence, this article intends to act as an informative guide on the steps to take in checking, building, and maintaining your credit score.
Credit Score: A Breakdown
Credit scores are figures that depict a person’s ability to cater to loans. It comprises a detailed listing of a person’s payment history, owed amount, length of credit history, credit mix, and new credit.
The system used by most people to generate their credit score is the FICO score system. According to this system, a promising and excellent credit score begins from 780, with 300 being the lowest score a person may possess and 850 being the highest score he could attain. A credit score of 660 is entirely satisfactory.
Credit Score/Report: Checking It
Several avenues exist for you to check your credit score. Ordinarily, you are entitled to a free credit report every year as a result of the provisions of current consumer laws. Sites such as http://ideaperminute.com could prove useful in this regard, all that is required is that following the prompts, you enter the necessary details, and the report will be displayed. This report will contain such things as your account(s), balances, payments, loans, comments on your profile, and other information.
Another means of checking out your credit score is to employ the services of online service providers like Credit Karma. Your significant function here is to register at no cost, and you will be updated regularly on your progress and methods to adopt to improve your score – at no extra cost.
Credit Score: Building It
You can deploy several means to build your credit score, and they are:
- Consolidation of Loans: this when rather than having to pay off various loans in various accounts, you pay off the loan to a loan consolidator at a reduced interest rate. Thereby saving money and improving your credit score simultaneously;
- Credit Report Disputes: this involves your reporting discrepancies discovered in your credit score when you look through it. For example, when you identify a transaction listed there that never occurred, or misreported balances and so on, you are to immediately report them to the appropriate bureaus who will, in turn, investigate them within 30 days and send a copy of the investigation report to you;
- Debt Settlement: this involves negotiation with creditors to collect a smaller amount from you while they settle your outstanding debts with others. This negotiation may be well out of your expertise, so it is advised that a knowledgeable third party be involved;
- Secured Credit Card: this tool can prove useful in keeping you and your score afloat in trying times. Most times, they will request a deposit, which the creditor will use to clear any outstanding debt you may have. Afterward, you will then be issued a credit card for the deposit amount paid.
Credit Score: Protecting It
For this, you will have to employ the services of professionals to monitor and update you on any progress, change, or regression in your credit score. Any of the service providers already listed above will suffice for this purpose.
A few of the service providers will require a start-up charge of $9.99 monthly, while others offer a free trial period of seven-thirty days. For an in-depth knowledge of the services provided, visit their websites or call any of the customer services offered.
Credit Score: Maintenance
Follow these few simple steps to follow to maintain your credit score:
- Practice prudent lending habits;
- Endeavor to pay credit card charges a week before their due date (to allow them process);
- Keep your credit score checking minimal, as it is taken to be a sign of desperation by creditors.