You’re probably aware of how important your credit score is when you’re applying for a loan or line of credit. But what do you know beyond that? Learn what your credit score means, how you can improve it, and why your credit score may differ depending on where you get it.
Your credit score represents your credit risk, or how likely you are to pay your debts on time. All of the biggest consumer credit scoring companies use a credit score scale of 300 to 850. In general, the higher your score, the less of a risk you are to lenders. This means there’s incentive for you to raise your credit score as much as possible. However, every lender weighs credit scores differently, meaning there are no hard-set rules for what makes a “good” or “bad” score.
In order to improve your credit score, you should first know how it’s calculated. Your credit score is derived from looking at five factors: your payment history, the amounts you owe, the length of your credit history, your mix of credit in use and the number of new accounts you’ve opened. With that in mind, here are a few tips to help improve your score:
You may notice your credit score is different from one credit bureau to another. This is because each bureau uses a different credit scoring model and iteration of that model when calculating your score. To get a better idea of how lenders may perceive your score, you can request your credit report and score from all three of the major credit bureaus and compare them.
If you have questions about your credit score, please contact your Seaside Client Advisor.Tags: planning, retirement