You have many.Įach credit bureau has access to slightly different information about you, and they each use a variety of scoring formulas to judge your trustworthiness for different purposes. Plus, if your score seems surprisingly low, that might tip you off to fraud or a harmful reporting error.įirst, it's important to understand that you don't have just one credit score. Monitoring your credit will let you know whether you're suffering ill effects and how much room you have to improve. And in many states, auto insurers can use your credit history to decide how much to charge. Some potential employers and landlords will check your credit before they make a decision on you. Keep in mind that credit scores are also sometimes used as an easy way to judge your overall trustworthiness. There are some good cash-back cards available to people who are still working on their credit, but not many. Say you’re keen to sign up for a cashback credit card: You might struggle to qualify for a card with the same kinds of cash-back rewards rates or low fees that your friends enjoy. Even if they do say yes to a person with a low score, they’ll often charge a high price to make up for the risk. Why? Banks and other companies don’t like lending people money if they’re not 100% sure they’ll get paid back on time. That number tells people how risky you are to deal with and directly affects the interest you’ll pay on things like credit cards, car loans and mortgages. Large companies called credit bureaus monitor your financial habits and use that info to assign you a number. Whether you know your credit score or not, it’s probably having a major impact on your life right now. Why do you need to check your credit score?
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