Submitted by: S Lopez
Credit scores are three-digit numbers used by lenders to determine your credit worthiness. Whenever you apply for credit, the score factors into the lenders’ decision whether or not to approve you for said credit. Read on to find out if you are eligible for a loan and how to improve your credit score.
Credit scores affect several areas of your financial life. Lenders use it to determine your credit worthiness, or to determine if you are able to pay your bills on time. The score varies depending on key credit-influencing actions over time. The actual credit score number can differ depending on the credit bureau (Equifax, Experian, or TransUnion) and the credit score model used.
Some significant factors remain similar no matter which credit score model is used. These factors include Credit Card Utilization, Percent of On-Time Payments, Derogatory Marks, Average Age of Open Credit Lines, Total Accounts, and Hard Credit Inquiries.
Having a healthy credit card utilization rate indicates that you use your credit responsibly. It can be calculated by taking your total credit card balances and dividing it by your total credit card limit. A credit card utilization rate should ideally be under 30% on average.
The percentage of on-time payments is a heavily weighed factor when calculating your credit score. Even one or two late payments will have an adverse affect the score. Paying your bills on time underlines your reliability as a borrower.
Derogatory marks on your credit report, such as collections, bankruptcies, and liens can trigger a significant drop in your credit score. Such marks show that you have mismanaged a portion of your credit. These can take 7 to 10 years to clear off of your credit history, so it is best to avoid them.
The age of your open credit lines is a strong indicator of your credit history. The older it is, the more accurate an assessment of your creditworthiness is. The way you’ve managed your credit over a longer period of time gives the lenders a better idea of how well you manage your finances. Therefore, it is a good idea to keep at least one older credit card account in tact.
The total number of credit accounts you have open and in good standing contributes to your credit score, as it indicates that more lenders are willing to grant you credit.
The number of hard credit inquiries on your report does play a role in deciding your credit score. Each time you apply for credit, a hard inquiry is placed on your report. Too many hard inquiries will affect your score negatively.
Unfortunately if you have a low credit score, the chances of getting any kind of credit are slim to none. This can be hard, especially when dealing with unexpected financial burdens. There are however, some organizations throughout the country that can provide you with fast cash, regardless of your credit score.
In California, for instance, City Loan Fast Cash is one such company. They provide auto title loans and other options for those in need of cash urgently who are not eligible for other, more restricted loans. City Loan prides themselves on their customer service and their ability to get the customer the cash that they need in as little as 15 minutes. You can conveniently apply over the phone or online.
About the Author: The writer of this article is a loan consultant with City Loan Long Beach that provides Californians with easy loans using the title of their vehicles.Website:
city-loan-long-beach.com/
Source:
isnare.com
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