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Don’t Be Overconfident About Your Credit Score

Many people apply their own logic for estimating their credit score and then get shocks on finding the reality. If you know the secrets behind the calculation of credit score, you will enjoy life better. Here are some of the gems –

1. Transactions on your credit cards are more important for computing your score than on a mortgage or auto loan. If you pay off your mortgage, you may see a small increase in your score. However if you pay off the balance on your credit card regularly, you will see a big jump in your score bong da truc tiep . So the score calculations give importance to revolving credit and not to static loans.

2. Delays on your credit card payments will lower your score substantially, reverse is not true. Timely payments on your card may not increase your score in the same proportion!

3. Your score can get bruised due to strange reasons you would not have even imagined in your dreams! Consider this – if you fail to return a book from your library, you may be fined, and if you ignore that fine, it may go in collection account. Finally, it can enter your credit report and will lower your score significantly! On the same lines, lot of other unpaid bills can go in collections and will end up on your credit report reducing your score before you realize what’s happening.

4. Nobody knows exactly how many credit cards you should possess for a good credit score. But if you have only one credit card and the card issuer slashes your limit, it will affect your score. Even if the card issuer hikes the rate of interest, it will hurt your score. So you should hold more than one card.

5. About 40 per cent of the employers will pull credit reports of their potential employees. This is mainly for assessing the possibilities of fraud.

6. If you are paying your bills on time, you may assume you have a high score. However, this is not the major criteria influencing your score. Payment of bills on time is just a small factor to assess whether you will be able to pay loan or not. There are many other factors also, which will be considered by the credit bureau.

Absolutely! Do you ever get the feeling that little three digit number was following you around, haunting you, taunting you with the fact that you need to make it as high as possible but it’s all but impossible to move? Credit scores can be a tricky thing, but there’s doubting the fact that they influence just about every part of our lives these days. Including our ability to get a job and our ability to get cheap car insurance. That being the case, if yours has taken a few lumps over the years it pays to know what you need to do to bring it back up.  

First and foremost, keep your current bills current. It’s tempting to nudge payments back a couple of weeks when you really don’t have the money, especially if you’re paying on back bills. The problem is, once you get behind you tend to stay behind-and that’s not good news for anybody. Slipping behind on bills inevitably ends up with bills in collections and even more black marks on your credit record, which is the last thing you need when you’re trying to pull your score back up.  

Secondly, take the time to check out your credit report fairly regularly. You’d be surprised to find out how often mistakes are actually made when you’re talking about credit reporting. For example, occasionally debts that have already been paid off will continue to linger. Accounts that aren’t even yours will show up on your credit report, or a payment that was made on time will be reported as late for one reason or another. If you can catch and dispute these things early you can put a stop to it before they have a chance to wreak havoc with your credit score.  

Finally, pay off your existing debts. This is the big one when it comes to dragging your credit score back up. You can keep it from getting any worse by keeping your current bills up to date, but you’re never going to bring your credit score back up to greatness (and enjoy the sweet car insurance rates that go with it) if you don’t get rid of the debts that are currently dragging you back down. If you’re in way over your head, don’t be afraid to speak with a professional to find out what you can do about it. The sooner you get those debts paid off the sooner your credit score will go up and you’ll be able to live your life without wondering when the other shoe’s going to fall-or how much your car insurance rates are going to go up this year.  

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