Advice: Credit Score

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Credit Score

You will find information on this page to help you find out more about your credit score and credit rating and how you can improve it. Your score will be very influential in determining your ability to obtain any further credit whether for debt consolidation or just a loan and it is important you know how to improve and maintain it to avoid the need for debt management.

What is a credit score?

It's a number lenders use to help them decide weather to give a person a loan or credit, and how likely is it that I will get paid back on time. A score is a snapshot of your credit risk picture at a particular point in time. The higher the score, the lower the risk to lender.

How are they calculated?

Every score is individual and is calculated by using a mathematical formula that evaluates all types of information on your credit report, compared to information patterns in millions of past credit files. The score can then identify your level of future credit risk.

What is the most important factor to consider?

Most credit score and credit rating agencies use five main factors to determine your credit score. Listed in priority order these are: Payment History, Amount owed, Length of credit history, new credit, Types of credit in use. These will vary between credit rating agencies but the essentials will remain the same.

Why do lenders use scores?

Scores provide an extremely reliable and valuable guide to future risk based solely on credit report data. The higher your score the lower the risk to lenders when extending new credit to a consumer. Debt Consolidation Loans often require a good credit score, so do not what till you have missed lots of payments to as for help.

Does everyone have a credit score?

Yes any one who has had credit will have a credit file. For a score to be calculated on your credit report, the report must contain at least one account that has been active for six months or longer. In addition, the report must contain at least one account that has been updated in the past six months. This ensures that there is enough information, and enough recent information, in your report to compute an accurate score. Your score also will not calculate if there is a fraud statement on your credit file or if all trade lines are disputed.

How often does the score change?

Your credit file is continually updated with new information from your creditors and companies you have applied for credit.

How can I improve Credit Score and Credit Rating Online?

Generally, people with high scores consistently: Pay bills on time Keep balances low on credit cards and other revolving credit products try not to have to many accounts open at one time.

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