As we get older, we begin to realise the importance of having a good credit score. You don’t only want to make sure you have money set aside for all your needs. You also want to make sure you're able to take out loans to purchase important or big-ticket items, or to borrow money in case something unforeseen comes up.
To have a good credit score, you need to be credit active. Credit activity is merely the creation of any type of loan or credit account. This means having a cellphone contract and any other accounts that typically fall under the category of revolving credit like clothing store accounts, and perhaps vehicle finance.
By taking good care with paying these accounts timeously, it will show that you pay your bills on time and can improve your credit rating.
In case you’re wondering, your credit score doesn’t start at zero. This is because your credit score is calculated only at the moment that a lender, credit card issuer, or other entity, requests to check on your creditworthiness. Before you are credit active, your credit score simply does not exist.
When building or rebuilding your credit, it's important to do your research so you can start off on the right track. It's also vital to know how your scores are calculated and which factors contribute towards making up your score.
People are often unclear about what goes into establishing a credit score, and many people make assumptions. These assumptions often turn out to be inaccurate. It's important to do your due diligence when it comes to your own credit score.
It's always a good idea to check your credit score as regularly as you can. Credit bureaus make mistakes and making sure you're up to date will save you headaches in the future. Things that will be on your credit report are:
The words, terms, and phrases that are used in the realm of finance and credit scores can be confusing. When trying to understand how to establish, improve and maintain your credit score it is important to have a knowledge of commonly used credit terms such as:
Each of the financial institutions will have different standards for what qualifies as a good credit score. It is important to be aware of your personal credit rating and always keep it in a healthy condition. A good credit score can mean it will be easier for you to secure better rates through your financial institution. This saves you money and may allow you to qualify for more loan options.
A good credit score is an important part of your financial history. A good credit score will help you secure things that you will need as you get older. Things like a car loan or a mortgage. A good credit score will affect the interest rates you are offered on other loans. We hope you enjoyed this article on the basics of your credit score. If you have any other questions or concerns about the topic, please contact Credit Health anytime.
In order to help you on your way to Credit Health, we've teamed up with Transaction Capital Recoveries and MBD Inc. By selecting continue, you give consent that we may check for any arrear accounts on your behalf.
In order to help you on your way to Credit Health, we've teamed up with Transaction Capital Recoveries and MBD Inc. By selecting continue, you give consent that we may check for any arrear accounts on your behalf.