You may be thinking about making a big purchase in the next few years, like a house or a car. If you’ll need a loan, know that prospective lenders will be checking your credit score. A good score tells lenders and others, like insurance companies, that you’re credit worthy, and it may help the terms you’re offered or the rate you’ll pay for the loan. Scoring systems are complex and vary among lenders, but here are some things they’ll consider:
– Do you pay your bills on time? Always pay your bills on time, as late payments could negatively affect your score.
– How many accounts do you have? A few established accounts tally in your favor, but too many can hurt your score.
– How long have you had credit? Your credit score relies on the number of credit lines you have open in good standing and the length of time they’ve been open.
– Are your accounts maxed out? Try not to carry balances of more than 50 percent of your credit limit on any account or it might lower your credit score.
Your credit report is a key part of many credit scoring systems. That’s why it is critical to make sure your credit report is accurate. You can order a free report each year from the three reporting agencies, Equifax, Trans Union and Experian. (Access them all at once on annualcreditreport.com)
To learn more about credit reports and managing your score, give us a call today.
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