This is the numerical presentation of statistical analysis of a person credit files. This is done to determine if a person is worth getting credit. The score is usually based on credit reports. This information is mostly used by banks and credit card Company to evaluate the risk that they will have to take if they are to lend a customer a certain amount of money or issue a credit card if the lender has a bad debt history the chances of him getting a loan shrink extensively. This score is used todetermine who will qualify for a loan and at what interest rate and how much that person can lend. This information is also very useful to lenders because they are able to determine which customer has the potential to bring most revenue. This method always provides accurate data and it can be used with maximum certainty. Other organizations that use this score are insurance companies, landlords and mobile phone companies.
The score provided is based on the information provided by the credit bureau, this information changes regularly and so does your score. By improving your credit score youwill be able to improve your chances of getting a loan and fill a credit card at any time.You will also be liable to better interest rates. A credit score is a three digit number that makes all the difference of how capable are you to repay a certain loan. This three digits will speaks lengths about your financial behavior and will let the interested party know how much credits do you have, how well have you paid your previous credits and are you a creditworthy person.
All this information comes from the three digits. The lenders are able to predict with a certain level of accuracy how likely you to repay the loan in the given period of time are. This figure will also determine how much interest rate the lender will impose on you. Previously you couldn’t view your credit score but now it’s possible to do that a t a fee. You can request for your credit score from the credit reporting agencies and study it. Once you understand you score you will be able to know how to improve it.You will need to understand how it is calculated and what you can do to change the score. Should you want to read more, ezcreditscores.com provides useful and valuable information about credit scores.
There are various ways to improve your score, one you should always keep old credit accounts even if you are not using them. Creditors tend to look at the average age of your accounts and make their own conclusion. The second thing is to review your credit report and check for errors. Over 70% of report contains error and you will be surprised at the number of errors you will find in your report. You should also reduce your credit card balance to 75%less than the available credit. Form a habit of paying your bills on time, punctuality in payment of bills. Also if you are able to complete the whole amount in time then this will go a long way in improving your credit score.