8 Things to Know About Credit Scores

Credit has a considerable role to play in your life. It can determine what kind of car you will own, the kind of house that you will live in and the interest rate that you will get in filing a loan application. 

It is used by loan lenders to determine if you are worthy of being granted a loan. Nowadays, credit score is easy to check. Banks, credit unions, and credit card companies have made it very simple for you to look at your credit score without any charges.

There are ten exciting things that you need to know concerning your credit score. They include:


You can get a good score using your credit

Some people have the notion that they have to avoid using credit cards, as they will have a good score if there is no lousy activity reported on their credit report. A credit report that has no credit is likely to have a bad credit score.

According to Mike Sullivan, a personal finance consultant with the non-profit credit-counseling agency Take Charge America, you will get a poor credit score if you do not use your credit card at all.


Credit score types 

Many people commonly think that they have only one kind of credit score.  The credit score gotten from a bank may be different from the one used by a loan lender to grant you a loan request. There are new models designed. For example, the Vantage score is a score developed by joining the three credit bureaus of Experian, TransUnion, and Equifax. 


Credit scores have a particular function

Most people wonder why their credit score is not determined using marital status, account earning, and several other factors. Credit scores are used as a mirror of how to manage your finances. It is created to assist lenders in understanding risks they are about to involve themselves into.


Number of applications

A credit application and the number of inquiries made for new accounts can affect your credit score. Submitting applications too often can make lenders suspect you.


Checking your credit rating will not affect your credit score

You can inspect your rating as many times as you want. Moreover, it is recommended to check your credit history on a regular base in order to eliminate any credit mistakes.


Access to credit score is starting to become a common practice

Each credit-reporting agency uses different and unique methods to compute ratings. These ratings vary in numbers from 300 to 850. High scores mean great credit history.


Credit scores can be used instead of a recommendation letter 

Many companies assume that a positive credit rating is a reflection of reliability and good individual character. A good credit score can be used in some areas to grant safety and security clearances. It can also be used to determine insurance coverage rates.


It is not difficult to boost your credit score

There is no doubt that good credit score is not that hard to achieve. As long as you can keep track of your loans and credit expenses and pay them off on time, everything is going to be alright!