Your Credit Scores Tell All About You
Your credit scores represent you in the financial industry; hope you have good representation.
Your credit score carries a lot of weight in the financial industry because it is a number that can be measured. Whether you like it or not, you are financially evaluated by your credit scores. The financial industry uses your credit scores to determine how risky you could be. So it is in your very best interest to do whatever you can to improve your credit score.
Insurance companies use your credit scores to determine your auto and home insurance premiums. If your credit score is too low, insurance companies assume that you are a bad risk and may cost them too much money in claims, so they charge you more in premium.
Your Credit Cards
Credit card companies use your credit score to determine your interest rates. If your credit score is too low, credit card companies assume you will cost them money with late pays, missed payments or collection accounts.
Mortgage companies, loan companies and banks review your credit score before deciding on whether or not to extend you a loan; and also what interest rates to charge you. If you have a credit score that is too low, they assume you are a risk, and may stick them with a defaulted loan.
Your Other Financials
Your landlord and utility company also uses credit scores to determine if you could be a potential risk.
Your Credit Score Is A Number
Since you are evaluated by a number, you want to know how that number is determined and what number you should strive to attain.
The 3 national credit reporting agencies distribute credit scoring models called FICO scores. These FICO credit scores range from 300 to 850. This credit score number is a prediction of your likelihood to be a high credit risk. The lower the number the greater risk you pose to creditors, lenders and insurance companies.
What’s Your Number?
Less Than 300
Credit scores below 300 are considered to be very poor and high risk. If your credit score is at 300 or less you need to improve your credit score to be removed from the high risk category.
300 to 750
You need to improve your credit score if it ranges from 300 to 750 because you are still considered a credit risk.
750 to 850
A credit score between 750 and 850 is a good credit score.
850 or higher
If your credit score is at 850 or above you are considered by lenders, creditors, landlords and everyone else in the financial world to be perfect!!!