March 9 2020
Are you finding it hard to access loans and credit facilities because of a low credit score? Financial lenders look at your credit score when assessing whether you qualify for a loan, and how much you qualify for. Credit scoring has been around for a long time, especially in the US and Europe with lenders increasingly relying on it as more personal financial data become available. Your credit scores will determine if you qualify for a new credit card, how much mortgage you can access, a car loan and other important financial facilities that you need. If you are wondering how to improve your credit score it is important to understand how it works.
The need to assess the creditworthiness of loan applicants led financial institutions to come up with a system to try and assess different applicants. The earliest and commonly applied credit scoring system is the Fair Isaacs Corporation (FICO) scoring.
Credit reporting agencies are also known as credit bureaus do this scoring depending on the personal financial information they pull from sources such as banks, courts, utility companies, and other public information.
FICO scoring assigns a creditworthiness label depending on how much you score from 300-850. The scoring is done as follows;
If your credit score is below 739 or GOOD rating, it is important to start considering tactics to improve the scores. Financial experts advise on the following;
The first thing to do is to how to check your credit score. You can do this by requesting your once per year free credit report from the credit bureaus. There are a few things you should be attentive about your credit report;
Erroneous entries, for example, loan repayments that are marked late even when you have cleared the loan
Fraudulent entries, for example, credit card usage that you cannot remember and verify. Financial identity theft should be reported at once.
Credit utilization looks at your revolving credit and how you use it. You should aim to stay at 30% or lower of your available credit on all cards. Your credit utilization ratio could still show up as high if your credit card issuer is reporting the balance on your statement to the bureau at the end of the month even when you have fully cleared it. You can arrange to pay several times a month.
Read More : How to Improve your credit Score ?
It is important to make a plan on how to improve your credit score if you are trying to take on a big financial undertaking. A high credit score enables you to take on a bigger car loan, mortgage or even small business loan, making your life significantly easier.
Get call us (888) 803-7889 to understand how to fix your credit score fast.