How Your Credit Score Affects Your Life
To many, the concept of their credit score is something that shrouded in mystery. Basically, it’s a score that determines your credit worthiness. The higher your credit score, the more credit worthy you are deemed to be.If you are a consumer in the American economy, this is something that you need to know. It doesn’t matter whether you have or don’t have a credit card. To a major extent, your credit score will determine the life style that you lead.
For one thing, it is the determining factor as to whether or not you get that loan. And if you manage to get a loan, it has a major impact on the amount of interest that you will pay. Your credit score will ascertain whether you are offered special credit card deals such as the lowest credit card rates, bonus miles, rewards program, and the such. Plus it determines if you’ll be able to get a mortgage on a home or if you will be forced to rent.
So, being that this score is evidently so important, what exactly determines your credit score?
A number of factors go into determining one’s credit score. Probably, first among them is your payment history. A late payment on your bill will drive your credit score down. The later it is, the more it is driven down. Multiple late payments drive this score down even further. Bottom line – if you don’t want your credit score to go down, don’t be late making your payments.
If you have a high debt to balance ratio, this will also drive your credit score down. In other words, the closer you are to the credit limit on your cards, the lower your credit score will be.
Lastly, how long have you had credit? Or, more precisely, how long have you been in their database? A teenager, or a person who tends to purchase everything with cash, will most likely have a lower score than someone in their sixties who has had credit since they were in their twenties.
Read more from Susanna regarding credit card bad credit and the best college credit cards at her website.
