Credit score determines the worthiness - By: Joy Mali M

Want to buy home, car or insurance or looking for a mortgage? But first make sure you have a good credit score.

People who are in need might glance over their credit score, but scores have significant role to play in one’s financial life. Credit scores cannot be ignored, as they also determine the interest rate which one has to pay on the credit cards.

Experian, Transunion and Equifax are the three credit bureaus that provide official scores gathered from the lenders. Each of these agencies provides free credit score annually to the individuals. Free credit check will make you aware about your credit worthiness. The lower limit of the score is 350 while the highest is 850. You need to have keen eye over your scores as you are weighted by lenders and scores are measures.

What can alter credit scores?

1. Late Payments

You have to avoid late payments as they have bad impact over scores and will bring down them with great number. Payment history has 35% role in calculating credit score. So there is need that you should pay attention.

2. Fat amount on credit cards

You can ruin your score if you carry big balance on your credit cards. Make sure not to spend over 40 percent of your available balance, as large amounts hamper debts utilization ratio. Charge only what you can pay monthly, it can bring the difference in your financial health.

3. Closing a Credit Line

You will risk your credit score when you wish to close credit card line because of the rising interest rates. Increase in the debt utilization ratio is also observed when you close card with zero balance. Similarly, when you want to open new credit card line, company will check your scores.

4. Defaulting

Your dishonest treatment towards repayment can hamper your credit score. Short sales, bankruptcies, foreclosures, and write-offs, among others will leave negative impact on the scores.

Credit lenders refer to your scores, which is foundation for determining how risky you are for lending money. With bad credit image, lenders will either deny you for any monetary aid or you will be charged with big interests rates.

Make a regular credit check to make sure that everything is accurate. You can also take advantage of free credit score quarterly. But checking the score more often is desired than doing it quarterly; with many website offering services of credit score through alerts can help maintain a good credit report.

About the Author

Know your credit score free and track your score with credit monitoring. Get your credit check from the three credit bureaus and also check with a credit estimator to make big financial decisions.

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