A good credit score is said to be a score in the 700 range but what is this and how can one be obtained? It seems like every bank that we go into will tell us something different, while one may tell us our 710 score is good and the other bank may tell us this is bad. Which is it? So what is a good credit score?
Credit scores are figured several different ways the main part of the credit score is how many accounts you have open and can your paycheck afford to pay them each month, have you been late making payments? These are all contributions that make up a credit score which a bank or lender bases your loans on.
Lending companies and banks look at these scores and base many things off of them such as can you afford another bill, do you make enough to cover what you owe now and will this put you in financial strain? A lot of people think by opening one loan and paying off several smaller ones then they are doing a good thing and you are only if you get a better interest rate and if you don't pay off the small ones to accrue more debt on it, if you do that then you are practicing a bad thing.
If you open a loan to pay off your credit cards, but then turn around the next month and charge them up again the cycle never breaks and you don't get anywhere but more pain and agony of more bills. You will always be in debt with this kind of lifestyle but it is a way of many and many do it but you are defeating the whole purpose of saving and building up your credit score. You need to pay bills off then keep them off or keep them at a minimal to where you can pay them off each month.
If you have a low credit score banks consider you a risk. A risk means that you may not be able to get them their money on time each month therefore making them skeptical of loaning to you. Banks won't a guarantee of getting their money paid back on time every month and that you can make a living still. Sometimes if you are a risk they make you put up money down, collateral or give you high interest rates.
No one can live well on making 1200 dollars each month but owing out 1150. You just can't live on 50 dollars a month it isn't possible, people do it all the time but it isn't healthy.
If you are in a habit of taking out one loan to pay off credit cards so you can charge more then you need to get a grip on your finances and think about what you are doing. What if something unforeseen happens and you get hurt, in an accident or lose your job do you have enough saved to last you for a few months? This is something that needs to be taken into consideration when applying for a new loan or mortgage.
Saving money to pay off your bills can be quite challenging especially if you are in some tough situations but it can be done. Paying your bills on time and saving money all make perfect sense and needs to be done for some financial freedom in the end.
Know that you know what is a good credit score you can get a credit report for free by using the government sanctioned site, and hopefully you will fall into a good credit score range. If not things can always be corrected.
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