Credit rating: – How you are scored?

Getting approval for any type of loan depends on your credit rating. If you have average

credit rating, you will find it almost impossible to get approved. It’s possible to get good

rating or even improve you credit rating. Most companies almost use same rating system

and if you can know more about it you should be able to have better credit score.

Your age is the first factor which it’s almost impossible to do anything about. Yes, it’s

possible to lie, but don’t because it will make things more difficult for you in future if the

creditor get to know. If you are between 24 to 64 years of age you will get one point. Any

age bellow or above that will score you zero point.

If you are married, you have chance of adding extra point to your score. If not, you still

score zero as most creditors see you as a higher risk. Also, if you have no dependent you

will score zero. But if you have between one to three you will add to your points. Here is

how it works – if you have no dependent creditors believe you can skip town and not pay

off your credit.

Creditors will also want to know more about your root. They will want to know where

you live. Owning a home with a big fat mortgage or even without mortgage will give you

more points. How long you stay in your present or previous residence also adds more

points to your score. If you’ve move so often you will score zero point. However, if

you’ve stayed up to 5 years before moving, you will surely get more point. It shows you

are a good risk to them?

Other factors that will add to your point are your years on job (the longer the better), kind

of job, your monthly income, present debt status, previous credit history and your saving

or checking account.

You credit score is usually rate between 350 and 850. The lower your score the more

difficult it will be to get loan. Scoring 800 or above should be goal of every consumer.

Below is list of short tips on how to achieve 800 credit score or above.

Limit the number of credit card you sign up for at a time. The more card you carry the

debt will have to live with. If one card is not enough for you make sure you don’t sign up

for more than three cards. Also make sure that you don’t go out with more than one card

in your pocket. That way you will limit your purchases when you are outside.

Make sure that you make your payment on time, if possible before the end of grace

period if it’s part of the service. Late payment will affect your credit score adversely.

Whenever you want to apply for credit make sure that you don’t apply for too much

credit often. Credit reporting agency may score you low as it means that you can’t live

without credit.

Another thing that reporting agency consider in scoring you is outstanding balance on

your credit account. If you are the type of consumer that often exceeds their limit you are

risking your credit score. So, make sure you don’t exceed 30-35% of your available credit.

It doesn’t make sense financially to always spend all your credit at a time.

Priscilla James

Recover Your Esteem

By |2018-12-30T16:11:58+00:00December 10th, 2018|Financial Recovery|