10 Things Everyone Should Know About Credit Scores
It was some few days back when I was sitting in a group with some friends from my school. It was the week of career going on in the school. All the students started staring at me when I started saying words like credit scores, personal loans, or debts. They were thinking that my work is boring, but everyone was happy at the end when the bell rang to end my class.
Recently, while I was talking to some of the students and community members, I was not able to find any change in the atmosphere. The event was to describe .10 Things Everyone Should Know About Credit Scores‘. I thought to make them comfortable while talking. I asked everyone with a smile, ‘will anybody tell something specific about the credit scores?’. The reaction was opposite as every body just started asking questions, without even knowing about me. And the questions were like:
- How do you build credit? I mean, how does it work?”
- “Is it ever too late to build credit?”
- “How do student loans impact your credit?”
- “How do you get credit when no one wants to give it to you?”
It was glad to see that i had some questions till that time to answer.
1. Credit Reports Are Different From Credit Scores
Credit reports are the details recorded by calculating the credit scores. It includes credit accounts, how often you apply for credit, debt collection accounts and some public records and some things other things.
2. Your Scores Are Based on 5 Core Factors
- payment history
- credit utilization
- average credit age
- account mix
3. You Can Get Your Scores & Reports for Free
You can get your annual copy of free credit score once in a year from any of these major websites listed below-
You can get your credit report from various places.
4. Checking Your Own Score Won’t Hurt It
A negative impact on your scores is left by only hard inquiries, and the effect is small and temporary.
5. There Are Different Scores & Different Credit Score Ranges, Too
While you try to find out your position or if your credit is improving, be sure that you know the range and you are comparing exactly the same score.
6. Your Credit Can Help You Spot Fraud
Have a watch on your credit scores regularly. If you find out large bills and unacceptable uses of your credit card, immediately contact your service provider. As it can be the case of fraud.
7. Your Credit Score Can Cost You A Lot Over a Lifetime
You will have to pay a higher rate of interest on credit loans and mortgages if you are having a low-interest rate. Use Lifetime Cost of Debt Calculator if you want to know how much your future debit costs you.
8. Joint Accounts Affect Your Credit Scores, But There Aren’t Joint Scores
Your account activity will be reflected on both your credit reports if you open a personal loan, home loan, business loan or credit card with a partner. Joint accounts and authorised users are different. But make sure that you are aware of the fact that who will be questionable and who will be responsible for mispayments, before sharing credits.
9. Negative Information Eventually Ages Off
Your credit report will have many negative information for different time spans. But generally, negative information makes your report older and it no longer affects your score after 7 years.
10. Credit Scores Aren’t the Only Things That Matter for Lending Decisions
The lender or borrower will not examine just your credit score while reviewing applicants. If you have a poor credit score, you can secure the loan through any alternate method.
More Common Credit Questions
The truth is, lots of consumers are confused about credit.
- How do you build credit
- Is it ever too late to build credit
- How do student loans impact your credit
- How do you get credit when no one wants to give it to you
- What is a FICO score and what does it mean
Related Post: How To Quickly Improve Your Credit Score?