Credit Score: Signifying Lending Credibility by joymali

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Credit scores determine the worthiness of an individual to receive loans. To compete with a certain standard of living, people are sometimes forced to rely on loans, which lead to a low credit score. Regular monitoring on your report and also working on your scores will help make your credit history healthy.

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									                         Credit Score: Signifying Lending Credibility

In this day and age, what is immensely powerful with a huge impact on our lives? The answer is
your credit score when it is about your financial life having direct influence on your personal
life. Lenders, bankers and other financial institutions check the scores and the history to
determine the risk associated with you before lending money. With a bad credit score, you leave
negative impressions on the lenders, as it signifies to them that you are risky borrower. There
might be speculation over lending money to you as the chances are that you might not be able to
pay back the borrowed money.

Factors affecting credit scores

The rising cost of living forces us to meet our needs as well as luxuries with taking out credit or
borrowing money. Our reason for debt is not just confined to buying new homes or vehicles but
people also seek lenders for day to day expenses.

The vicious cycle of loans and low credit scores – this is awful! But the truth is that people look
for new debts too so that old ones can be paid down. With expanding day to day needs, the use of
credit cards and loans is increasing, which may bring down the credit score. People have to cope
with the demands of their standard of living, loan payment and low credit score from a single
point.

Credit score differences between credit agencies

Equifax, Experian, and TransUnion are the three major credit agencies. Your annual credit report
by these agencies varies from each other, which leads to differences in scores. The distinction in
the annual credit report and score is also observed because of the differences in the calculation
models used by these agencies. A regular credit check and history check is vital to keep tabs on
your scores, so that sound financial health can be maintained. You can also report to the agencies
if any discrepancies in the history are encountered.

Work on your credit report to pay less

With the high cost of living, one should also tackle ways to manage credit scores in an efficient
manner. Working on your credit report will help alleviate you from complex situations and
lenders can bank on you for the repayments of loans. In times of need and bad credit scores, you
have to pay a large amount of interest, which could have been lower with a good credit score.

								
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