In modern times, using credit to support and finance everyday needs has become a common occurrence. In most cases, it is easier to borrow money in an emergency, or to fund a much needed holiday then trying to save money in advance. Having access to credit and the amount you borrow can depend on a number of things, such as credit/personal history, employment and income.
All of these can affect your credit score, so ensuring that you have a solid rating is important.
What is a credit score?
A credit rating is the evaluation of a person’s ability to fulfil their financial commitments. It is based on previous dealings and reflects how well someone can manage finances and debt. Lenders will use your credit rating to make a decision whether to lend you the requested amount of money or credit card.
If you had one of the two in the past and have been unable to pay it off, this may result in a default, which can affect your rating and be noted down on your credit report. A lender will then see you as being unable to handle or manage debt.
How can a credit report help me?
Any credit history, from loans and credit cards, to mortgages ,as well as any accounts, along with your credit is noted down on your credit report, and reflects your ability to manage credit.
Credit reports are generally free and can give you an idea of your credit status. The rating will give you an indication of how likely you are to be accepted for a credit card or loan and also provide reasons and explanations for your rating as well as defaults.
As a credit report can go up and down, depending on your financial activities, it is always worth checking it on a regular basis, in the event that your rating does not look too great, you can attempt to improve it. The report will also give you information on how to up your rating your rating and tell you what has decreased it and a monthly overlook at the status of your score.
What can affect my credit score?
As mentioned previously, a credit report details all your financial transaction from loans to credit cards and mortgages. Using any of these financial products can have a positive and negative impact on your rating and is reflected in the report.
Other occurrences that can affect it include making multiple applications for loans or cards, declaring bankruptcy or reaching a settlement (you can arrange for a settlement to show up as “paid”), maxing out cards and inaccurate details.
A credit report should give you an insight on how to better manage your finance and debts. Some free credit report providers can also give you advice and information on how to better understand your report as well as offering guidance on how to boost your rating. Some companies charge a monthly fee, but this allows you to view your full report and enable you to have access to a variety of financial products.
By Harry Price
Harry Price is a a talented young man, from cooking complicated dishes to speaking various different languages, no challenge is to big.