What's up with Your Credit Report Score?
Contributed by Rachel s Pickett
What is a Credit Report Score?
A credit report score is a number that financial lending institutions use to determine credit worthiness. A credit report score is calculated with a rating system based on points earned for good credit. Points are earned for paying bills on time, keeping credit card and loan balances low, types of credit you have, and the amount of credit you have. A total of the points from the credit rating system creates a credit score. Credit report scores are used when applying for new credit, automobile loans, home mortgages, and personal loans to name a few.
What is a Good Credit Report Score?
The average credit score ranges between 300 and 870. The higher the score, the better your credit. Having a low score can actually raise your interest rates and deny you credit. Credit companies may also use their own system of evaluating credit risks. You become a credit risk when you apply for a credit card, auto loan, or any financial credit extension for the company you apply with. With most companies it has already been decided between which numbers is good credit worthiness. This number can range from 500 up to 800 and beyond.
How Can I improve My Credit Report Score?
The first step you need to take in repairing your credit report score is to check your credit report and/or score. Knowing your credit rating will help you decide where to begin fixing your credit.
Credit Cards
When using credit cards, it is important not to have too many cards. Most consumers carry between two and 6 credit cards. Having 2-3 credit cards is appropriate, more than 4 is excessive. Keep your credit card balances low and make the full payment each month. Credit lenders do not want to see you spreading your credit thin. It is advisable to use your credit cards conservatively.
