What does my credit score affect?
Posted by Info BestCreditRx on Wed, Feb 01, 2012 @ 05:57 AM
Your credit score is likely the most important three-digit number in your life.
Your score affects how much you pay for credit, and it can affect other bills you pay, where you live and where you work.
- Banks and credit card companies review your score when deciding whether to extend you credit and how much interest to charge.
- A high score can lead to lower car- and home-insurance premiums, a deposit waiver from utility companies and a better service package from the cell-phone company.
- Many landlords check credit scores before allowing you to sign a lease.
- Many employers do credit checks on prospective employees.
With so much at stake, it's wise to find out where you stand and take steps to raise your score if it's below 700, particularly before you apply for a mortgage or other loan. Above 760 and you're in the upper echelon. A score below 620 tells people you're not a good risk and dooms you to credit denial or subprime interest rates.
And don't be surprised when the low end credit score of 620 is increased to a minimum of 640 to get approved for a home loan. The mortgage lenders and Fannie Mae and Freddie Mac have already said that higher scores will be required in the future to get approved to buy a new home.
Credit requirements are tightening everywhere. Why? Risk. Scores below 680 are considered much more risky then those over 680 when it comes to whether or not you are going to pay your monthly obligations or not.
Every time you make a late payment your score drops. Every time you pull your credit your score drops. When your balances on credit cards goes above 30-40% of your total avaialable credit, your score drops.
So what do you do? Pay your bills on time. Don't apply for credit at every store you shop. Don't let your credit line creep up on you. Pay down your cards. Make payments on time and don't get credit at every Tom Dick and Harry you shop at.