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Understanding Credit Scores
For most of us our credit score is something that does not really cross our minds unless we are finding difficulties in obtaining a mortgage or finance. The reality however is that our score is something which we should think about a lot more. That is because by understanding how credit reporting agencies arrived at a figure for us we can work to improve our ratings much more easily.
Why is that important? Simply because the better our credit rating the easier we will find it to get credit and not only that but we will be able to access that credit at a much lower interest rate. There is increasingly another reason for wanting to ensure our credit rating is the best that it can be. Employers are much more frequently asking for reports on potential new employees and also those that they are considering for promotion. This is to enable them to view whether the employee has honesty and financial integrity.
One thing which surprises many people is that there is not just one credit score held for them. There are basically two types of scoring one which is held by each individual bank or lender that applies to how they view you in respect of how you are conducting your account with them. This is what is known as a custom credit score and is mainly used when a lender is considering an application you might have made for a top up or renewal on an existing loan agreement. If this score is below that particular lender’s minimum level then your application is very unlikely to go ahead even if your score overall on the credit bureaux records are good.
It is the credit bureaux own, or generic, score which is the thing that most of us think of when they think in terms of their credit score. This generic figure reflects all the various loan and mortgage commitments you have with different lenders. In recent years the three main reporting agencies have begun working together to standardise their figures under a system which is known as VantageScore.
This co-operation has meant that Experian and the other national reporting agencies, Equifax and Trans Union, now all work to an agreed formula and give a credit score which is on a scale making it simple to associate your VantageScore number to an academic letter grade. That scale falls into 5 grades which describe your borrowing status as Super Prime, Prime Plus, Prime, Non-Prime and High Risk.
The factors that help the agencies decide into which of these categories you fit into are:
Payment history
Utilization
Balances
Depth of credit
Recent credit
Available credit
You can now see just how important all the various aspects of your borrowing history can be in deciding how the reporting agencies view you as a lending risk. And of course by knowing the things they consider important you can begin to take more control over your own score.
For most of us our credit score is something that does not really cross our minds unless we are finding difficulties in obtaining a mortgage or finance.
The reality however is that our score is something which we should think about a lot more. That is because by understanding how credit reporting agencies arrived at a figure for us we can work to improve our ratings much more easily.
We Understand Your Credit Is Important
Why is that important? Simply because the better our credit rating the easier we will find it to get credit and not only that but we will be able to access that credit at a much lower interest rate.
There is increasingly another reason for wanting to ensure our credit rating is the best that it can be.
Employers are much more frequently asking for reports on potential new employees and also those that they are considering for promotion.
This is to enable them to view whether the employee has honesty and financial integrity.
We Help You Understand Your Credit!
One thing which surprises many people is that there is not just one credit score held for them. There are basically two types of scoring one which is held by each individual bank or lender that applies to how they view you in respect of how you are conducting your account with them.
This is what is known as a custom credit score and is mainly used when a lender is considering an application you might have made for a top up or renewal on an existing loan agreement.
If this score is below that particular lender’s minimum level then your application is very unlikely to go ahead even if your score overall on the credit bureaux records are good.
It is the credit bureaux own, or generic, score which is the thing that most of us think of when they think in terms of their credit score. So ask yourself, are you REALLY getting your accurate Credit Score?
Click Here To Get Your Instant 3 In 1 Credit Score Now
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