Credit Score Essentials You Need to Know! A survey by National Foundation for Credit Counseling revealed that only 12 percent people were embarrassed to admit their weight, while 30 percent were embarrassed to admit their credit score. Bad credit score is a worry for most individuals because it can be a barrier in getting loan approvals. To repair bad credit score or stay away from the negative score, an individual should be aware of the common things about the credit score.
So, here are 5 important things about credit score everyone should be aware of: No Single Number There's as such no single credit score accepted by all the lenders. For example, the compliers of FICO credit score allow the lender to customize its system. As a result, different lenders have different scores. Also, Equifax, Experian and TransUnion have proprietary scoring models.
Different Scores for Different Scales FICO has a credit score range between 300 and 850 and to get the best mortgage rate, an individual should have a credit score of 760 and more. But, to get best deal on auto loan, a score of 720 is sufficient. So, if a lender has denied offering you loan or the best interest, he must tell the score used and the factors that affected the score. Free Credit Report Check Every individual can check the credit score by requesting for a free credit report from the credit bureaus, once every year. But, the report won't have the credit score. Most lenders consider FICO scores, so it is a good idea to be aware of them while applying for mortgage. Maintaining Credit Health All the credit scores are based on the same set of factors to indicate the creditworthiness of an individual. So, it is necessary to be aware of the amount of debt a person has and credit available to him. Paying bills on time helps and if an individual already is making a timely payment of different mortgages, it will boost the score.
Credit Score Is Never Stagnant Since the information in your credit files get regularly updated, your credit score will definitely see a change. Before applying for a mortgage, it is better to check the score because the number you had a few months ago might have increased or decreased in the time span. Improving the credit score isn’t difficult, provided you are updated about the score and making payments on time. Individuals don’t need to have a thorough knowledge of credit scores or their expertise in the field, but being updated of what works in their favor will definitely help.