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Understanding Credit Ratings
Having Difficulty Understanding Credit Ratings?
Getting approval for any type of loan depends on your credit rating. If you have an average credit rating, you will find it almost impossible to get approved. It is, however, possible to get a good rating or even improve you credit rating. Most companies use a similar rating system so if you're able to know more about it you should be able to have better credit score.
Your age is the first factor which it's almost impossible to do anything about. If you're between 24 to 64 years of age you will get one point. Any age bellow or above that will score you a zero point.
If you are married you have the opportunity to add an extra point to your score. If not, you still score zero as most creditors will see you as a higher risk. Also if you have no dependents you will score zero. If you have between one to three dependents, you will add to your points.
Understanding Credit Ratings Can Improve Your Credit Score.
Here is how it works:
1. If you have no dependents creditors believe it more possible for you to leave your area without paying off your credit.
2. Creditors will also want to know more about your roots. They will want to know where you live. Owning a home with a large mortgage or even if you don't have a mortgage, you will get more points.
3. How long you stay in your present or previous residence also adds more points to your score. If you've moved often you will score zero points. However, if you've stayed up to 5 years before moving, you will surely get more points. It shows you to be a good risk.
4. Other factors that will add to your points are your years on the job (the longer the better), the kind of job you have, your monthly income, present debt status, previous credit history and your saving or checking account.
Understanding Credit Ratings To Get A Score Of 800 Or Higher
Your credit score is usually rated between 350 and 850. The lower your score the more difficult it will be to get a loan. Scoring 800 or above should be goal of every consumer. Below are a few tips to help you achieve an 800 credit score or above.
Limit the number of credit cards you sign up for at a time. The more cards you carry the larger the debt you will have to live with. If one card is not enough for you make sure you don't sign up for more that three cards. Also make sure that you don't go out with more than one card in your pocket. That way you will limit your purchases when you are outside.
Make sure that you make your payment on time, if possible before the end of grace period if it's part of the service. Late payments will affect your credit score adversely. It's best to only use your credit cards for a convenience by paying back what you spend at the end of the grace period.
Whenever you want to apply for credit make sure that you don't apply for too much credit often. Credit reporting agency may score you low as it means that you can't live without credit.
Another thing that reporting agencies consider in scoring you are the outstanding balances on your credit account. If you are the type of consumer that often exceeds your limit you are risking your credit score. So make sure you don't exceed 30-35% of your available credit. It doesn't make sense financially to always spend your available credit.
Follow these steps and you will see an improvement in your credit score.
You can also get help for understanding credit ratings to improve your credit score. Find out more about how lenders see you:
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