Scoring System: How do you know if you have good credit·

Posted By: Matt in Credit on 02/01/2016 at 13:58:42

When you wonder openly about your credit score and if it's truly as good as you think, you might defer to that three digit number that appears every time you inquire about money, credit or borrowing.

And don't misunderstand that the score itself is a good indicator of where you are as far as how lenders see you.

But, it hardly is the bottom line and the end all, be all. That's because creditors don't view the score quite the same across the board. There are several indicators that are common place and viewed as a means to cement your status as a person that lenders see as a sure thing, rather than a liability.

So what exactly should you be looking for· What practices make your score perfect·

First, and the easiest is simply paying your bills on time. Not doing so is going to slowly but surely chip away at your credit score over time, and that is gong to spell bad news as you begin to want to borrow or manage your money accordingly.

As far as not paying at all or debt needing to be collected by an official debt collector is a sure fire way to be denied and then some. That negative check mark of sorts can last on your credit for nearly a decade, depending on the creditor and the amount. Even a $50 collection fee is going to hurt your chances of borrowing money or having the opportunity to buy a home or a car or money for school, for example.

For those who borrow money, do you tend to get the lowest possible rate, particularly when you buy the big ticket items like cars and homes· A lot of times you'll see promotions and specials for 0 percent financing or low rate terms of a 30 year fixed mortgage and you seem to see that you qualify for the former and have bottom barrel rates for the latter.

That's a great sign, and so is that influx of so called "junk" mail that is asking you to sign up for credit cards. Not getting them isn't the end of your credit prospects, but when creditors find you and want you to enroll, they're certainly not going to waste their time with someone who isn't going to qualify or doesn't even have a remote chance of doing so.

Good credit is the core of your finances and your financial future and not paying close attention to it or ignoring it all together is going to impact what you can get or just how easily or difficult acquiring it is going to be.


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