Having a good credit score is important whether you are qualified to take a loan or not. Credit Score determines the most critical aspect of your financial record; it determines your eligibility for a mortgage, a car application, rental, or even landing a better job.
Generally speaking, credit scores are number ranging from 300 to 850, these numbers determine your credit rating. Credit score is usually regulated from your credit report including your payment history, your debts, and the length of your credit history.
It is common knowledge to know your credit rating to obtain a loan or a credit card. But what exactly can you call a good credit score? There is no official definition for a good credit score but all we need to know is a good credit score is one which has a range of 700 – 850. However, there are different ways to tell if your credit score is good or bad. First, let’s take a quick look at the credit rating. Is your credit score is good or bad?
Is your credit score is good or bad?
Bad credit score (300 – 599), Poor credit score (600 – 649), Fair credit score (650 – 699), Good credit score (700 – 749), and Excellent credit score (750 – 850).
If your credit score is within a range of 650 – 850, then it means you have demonstrated a great sense of responsible credit behavior, and you are eligible to apply for a mortgage or a credit card. There are various types of credit bureaus, these bureaus determine your credit score, but not all financial loaners report to all bureaus. Some report to two, some report to one, and some others report to all. The various credit bureaus are Experian, Equifax, TransUnion, VantageScore, and FICO.
However, the best and widely accepted credit measuring risk checker is FICO Scores. A FICO Score with 620 is considered a good credit score as it is the most commonly accepted score if you are looking to apply for a loan. However, you cannot get a credit card with a credit score of 620 because this score is considered too low for most credit card issuers. So, to apply for a credit card, you will need a credit score of 750 or higher which is ‘excellent’ to be able to obtain a credit card.
Why Do You Need To Monitor Your Credit Score Regularly?
Most people don’t think it is important to check their credit score until they are ready to apply for a loan or credit card. Some have never checked their credit score before. Checking your credit score is easy. Some even avoid checking their credit score because of what they might find when they check; they have this conviction that checking their score may affect their credit. Well, checking your credit score regularly is not such a bad idea. As long as you are monitoring through a credit scoring service, then your credit would be just great.
There are some reasons why you should check your credit score regularly
- Knowing Your Stand.
The most important reason why you should check your credit score is to know where you stand, and how much opportunities you have. Your credit score is the most vital part of your financial health. Not paying attention to your credit score is like ignoring your physical health. Ignoring your credit score will cripple your financial stand. Whether good or bad, it is advisable to know, not having an idea of what your credit score is can damage your financial health. Well, the good news is, if your credit score is bad, there are steps to take to improve and maintaining it.
- Keeping Your Credit Score In-check.
In college, you could cram for an exam and ace it. However, your credit score is not a college examination. If you need to apply for a loan or credit card, you can’t get your credit score ready with a push of a button. It takes months, maybe years to even build up a good credit score. Monitoring your credit score gives you control over your credit and makes you responsible for keeping your score at a great place.
- Keep your Credit Information Accurate At All Times.
Your credit report reflects your credit score. Keeping an up-to-date check on your credit score gives you a distinct knowledge of what is on your credit report. If your credit score is lower than expected, you need to double check your credit report for error or contact the credit bureaus.
- Figure Out What Reduces your Credit Score.
While you monitor your credit score, you need to pinpoint the reason for the fall in your credit score. As you monitor, you can tell the financial actions that affects your credit scores. For instance, applying for a new credit card can affect your credit. Once you have all the information you need, then you can know how exactly to stop your credit score from decreasing.
- Respond Quickly to Changes.
Monitoring your credit score on a regular basis will help you respond to any changes made to your credit score. Your credit score is not embedded with an alert that tells you when it falls. So you need to check regularly to be updated on your score. If your credit score drops, you can use the information on your credit report to vet the score changes, and then take steps to restore your credit score as soon as you can.
- Check-up on Your Eligibility For a Credit Offer.
For you to know when you might qualify for a better credit offer you need to keep checking. You will have a better chance of getting a credit card as your score improves. Also you get a better interest rate, reward, and other incentives. Finally you can use a good credit score as a bargaining chip to your credit card issuer to lower your interest rates. If this doesn’t work out, consider applying for a zero percent balance credit card transfer. With a better credit score, you can increase your chance of eligibility.
How To Improve Your Credit Score?
If your target is 850 credit score, there are few steps to take. However, you need to know that a perfect credit score doesn’t matter because you get the same benefits and interest rates with a 750 credit score. With a high credit score, you can make or break your qualification for a loan, credit card, or car rental. When you take a loan, you need to be able to prove that you can handle the payback time promptly. Imagine the times you pay your debts as a touchdown, and you will always be within the timeframe to set up an operational, financial tactics.
Your payment history influences your credit score heavily. This is an important aspect for VantageScore and FICO. So, for you to stay on top of your payment, you need to set up a reminder to help you pay on time, or you can enroll for an auto-payment. On time payments applies to all bills including, cell phone services, rent, utility bills. Late payments can put a stain on your credit report for seven years, but the impact on your credit score will eventually decrease over time. Most times, the negativity on your credit score lasts for just two years, so you need to keep making timely payment, and this negativity will fade off sooner than expected.
Sign up for a Credit Monitoring Service
You need to monitor your credit score closely for any inaccuracies because identity theft and reporting errors can disrupt your journey to an excellent credit score. You need to be on the lookout for new hard credit inquiries. If you see some new inquiries that you did not authorized be very skeptical and call those companies before someone opens a credit account under your name. So, what you need to do is to sign up with any good credit health service to help you monitor your credit score. Also, you should make a habit of checking your credit report at least ones in 3 months to ensure you are still on track. If you find something that doesn’t feel right in your credit report, you should take steps to dispute this errors by sending a dispute letter to the credit bureaus.
Credit utilization is another piece of the puzzle. It measures the available balances on your credit card about the credit card limits. Your available balance needs to be higher than your debt. It is calculated as the total balance on all cards divided by the sum of credit limits.
The common rule with credit utilization is to stay lower than 30%. This technique applies to all your credit card and your total credit utilization ratio. There are some known strategies for improving your utilization ratio. These strategies works by shrinking the balance owed and maintaining or increasing the available credit. To improve your credit utilization, you can try these techniques.
- Increase the monthly payment to decrease your credit card balance rapidly.
- After paying off your debts, do not close the cards, leave them open to reduce your overall debt. However, always maintain the total limit.
- Request for an increase in your credit limit on your cards.
Credit mix is a different type of loan product credit history. It has a much lesser influence on your credit score, but you need to also consider credit mix. The scoring model also focuses on your ability to manage your various types of finance, from credit cards to personal loans or mortgages. While having an eye-catching credit mix that can help you reach a better credit score, it is advisable not to take any financing that you can’t handle at that point. Being careful of your credit mix is important. Also, note that your credit utilization and payment history should be your principal focus.
Hire a Good Credit Repair Company
Credit repairs can be very challenging. Everyone wants to secure a better credit score and fast results, so if you are someone that wants to secure a better credit score and you don’t know how to do it, then hiring a good credit repair company is your best bet. There are lots of benefit to working with professionals that know what they are doing. Credit repair companies have a team of professionals with great skill set and consumer credit knowledge. They know how to use the federal consumer protection laws like the FCRA, FCBA, and FDCPA to uphold your rights. Also they know what is best for you and how to handle creditors that reports you to the credit bureaus.
How to achieve Good Credit Score
Credit Repair Company can equally save your life in any area of your credit score. With a better credit score, you can make a big difference in interest rates, employment opportunities, and insurance premiums. Although you can do credit repairs yourself, but going through credit report, credit scores or even the consumer law can be a little bit tasking, and also take a lot of your time. This process requires a calm mind and a good knowledge of this problem, and this is where the professionals step in. Some credit repair task includes
- To identify the consumer protection law for a situation.
- Contacting the right creditor or credit bureau to notify an issue with a score.
- Doing a follow up on the subject matter but this depends on the response received.
- Doing a lot of paperwork and tracking communications.
Does it sound overwhelming? This is why you need a credit repair company’s help. Why spend time struggling to make sense out of the credit repair process? Consider your options now.