About credit scoring:
When your data on your past credit history is compiled to check whether you can be given a loan
or simply to know your financial position that is known as credit scoring. It shows whether you
can be given credit by various financial institutions. The credit scoring will show your credit
worthiness and this information can be accessed from various credit bureaus. What’s a good
credit score will depend on a variety of factors. The most important thing to note is that the
higher your credit scores the better for you since you can get financial assistance from various
financial institutions at a lower interest rate.
The information on credit scores unlike in the past can be accessed online and therefore, the
financial institutions don’t have to consult with the credit bureaus. This has been made possible
as a result of advanced technology which is currently being used. Apart from the banks the credit
card companies are also interested in knowing your credit score when you are applying for a
credit card with their company.
This is very important in ensuring that the person that they are dealing with is financially sound and therefore, reducing the chances of dealing with a person
who does not have money in the account. When you want to get a loan from a financial
institution your credit score will be used to know how much you can be given and at what
interest rate. What’s a good credit score is considered by most lenders to be above 700 and this
can allow you to be in a position to select your interest rate from different lenders.
Many people who deal with you on matters of finance will be interested in knowing your credit
score. Apart from the banks the insurance companies may as well be interested in knowing your
financial position. The credit score can be used by different institutions to determine the client
who can bring in a lot of revenue in the company. What’s a good credit score is considered to
be anything above 700. This will determine how your company will be doing compared to other
companies. You don’t want your company to be dealing withy people who have a very low
credit score.
It is quite important to know that what’s a good credit score changes and as such it may
increase or decrease. The debt of the client is just one of the reasons which might cause decrease
of credit score. In the United States students were encouraged to start improving on their credit
score when they were still in college. This was due to the fact that they received their first credit
cards when they were in college. You might increase your credit scores by simply having used
your credit card for long. It is however, important to note that the history of how you have been
using the credit card will determine whether your credit scores will be high or low.
What’s a good credit score will therefore, depend on a number of factors and it is bound to
change. Any credit score which is below 499 is considered the worst and you need to work very
hard to improve on the scores. This is because it will attract very high interest rate from the
financial institutions.