Although credit report monitoring is essential to maintain good credit, creditors rely primarily on your credit score ratings to extend you credit. And the higher your ratings, the better your terms and interest rates when it comes time to borrow money. Everyone has three credit scores, calculated differently by each of the three credit agencies, and one bad rating can ruin an otherwise good credit score ranking. The best way to ensure that all of your credit scores remain as high as possible to get a good credit score rating is to build a solid credit history, and monitor your credit reports for incorrect information and fraud.
Credit score ratings range from a low of 300 to a high of 850 on the FICOscale. You can see exactly where you stand in the eyes of lenders by looking at a credit score rating chart, which can be found on many financial and consumer advocacy websites. Although the numbers vary from site to site, it is the general consensus that any credit score number above 659 is considered good, with a “good” credit score range falling between 660 and 699. If your scores are above this point, you should have no problem obtaining credit at reasonable interest rates and terms.
It’s important to note that creditors aren’t the only ones who look at credit score ratings. Employers, insurance companies, utility providers, and even landlords look at credit scores to determine the level of risk you present to their businesses. If your credit score is less than good, you may be turned down for a job you really want or need, be required to pay significantly higher deposit to have your utilities connected, or pay higher premiums to buy insurance.
If your credit score ratings are below 659, you’re going to have to start doing some credit clean-up to get to at least a good credit score rating, and it all starts with your credit reports. Get a copy of all three of your credit reports, and scour them for information that is wrong or misrepresentative. If you find that there is incorrect information on your report, immediately write a letter to the reporting credit bureau and ask that it be removed.
Removing bad information may be enough to increase your credit score ratings, but if it doesn’t, and you need more help to get into a higher credit score range, you’ll have to take additional steps. Getting the debt ratio on your unsecured debt down below 30 percent is a good way to start. You must also pay all of your bills on time. Information on late payments made in the past will not immediately go away, but continuing to pay late extends the damage.
By tracking your credit score ratings, and improving them to get them to the upper end of the credit score rating chart, you will be able to easily get the credit you need at a good interest rate. They can also help you when it comes time to buy insurance, get a job, rent an apartment, and even have utilities connected at your residence. Good credit scores can save you money in many different ways.
If you’d like more information on managing and monitoring your credit to improve your credit score, visit ScoreSense at www.scoresense.com