Keeping Score

Filed under: Adults, Young Adults, Lending

     You know that your credit report has a lot of information about your borrowing history.  How credit worthy you are, how likely you are to pay off your debts on time, as well as an indicator of how you are likely to behave in other areas. 

     Employers rely on credit reports to see if you will be a good employee, landlords check to see if you will be a reliable tenant, insurance companies check to see if you are a good insurance risk, and of course, lenders check to see if you are a good credit risk.  How much you pay for car insurance or what interest rate you pay on your next loan may be affected by your credit history.

     If you have had credit in the past, you should have a credit score.  Scores range from 350 to 850, the higher your score the better.  Fair Isaac, the country’s leading compiler of credit scores, bases your credit score on many factors including how you have paid debts in the past and how much debt you currently have.

     How you handle credit will be part of your credit history for many years.  Below are some of the factors that can have an adverse affect on your credit score.

*Delinquent payments (past or present)

* Collection accounts, liens, or judgments

* Excessive debts in relation to your income

* Excessive amount of unsecured debt (ex… credit cards, finance company loans)

* Bankruptcy

      Remember, it is never too late to improve your credit score.  Take a serious look at what you owe and what you are buying.  Set up a budget to keep your accounts current and pay down your unsecured debt.  Contact lenders immediately if you are having problems making payments.  Bankruptcy is not the answer, in fact it will be part of your credit history and will affect your score for the next 10 years.  Improving your credit score can save you money on loan interest and insurance premiums.  A good score can also help you get the things you want out of life like a good job and a home of your own.

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