Your Credit Score: What Is It and How Can You Improve it?

According to The Big Picture, as of 2010, 25% of Americans had bad credit scores which could be extremely harmful if you’re trying to stay debt-free in this difficult time.  So what is a credit score?  And how can you improve it to ensure you never declined for credit reasons?

What is your Credit Score?
If you want to take out a bank loan, mortgage, a mobile phone contract or even if you want to finance an expensive item, the provider will check your credit score to see whether you’re an acceptable financial candidate for their product.

From lenders’ perspectives, this ensures that you are responsible enough to pay them back on schedule and that you won’t be a financial risk.

Depending on the results of your credit score, you might not be eligible for the product, so your credit score can have the potential to dictate what products and services you receive.

What Exactly Can A Credit Score Dictate?

Crucially, a credit score is not only responsible for a ‘yes/no’ decision on whether you receive a particular product or service, but it can also determine the level of quality and support your product or service may receive.

For example, if you are looking to get a particular credit card which has a particular benefit, the credit card provider will do a credit check on you and determine that you are not eligible for that benefit; instead you might have to look for a slightly less inclusive deal.

So, you can see that your credit score is extremely important, and that if you want to get by financially, you’ll need to cultivate it as much as possible.

Cultivating Credit

To know how to improve your credit score, you need to know what criteria the scorers are checking against.  You can actually see your credit score online at any time, and by doing this you’ll learn what you need to improve to boost your overall score.  There are some common things you can do to really make sure you’re covering the most bases, however:

  • Use your land line – not mobile – phone number on your applications.  This is important because it shows that you’re not looking to move any time soon.
  • Get a credit card and spend a small amount of money on it each month.  If you pay your bill on time, you show that you can borrow money and give it back in a timely, responsible fashion.
  • Be on the electorate roll; this means that they can see that you’ve lived where you say you’ve lived.

It Takes Time

Building up a credit score can take a lot of time. If you need some cash flow in the short-term, you could look at getting an unsecured loan  – just make sure that you can afford to pay it back quickly since the APR is quite high.  Doing so might even improve your credit rating.


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1 thought on “Your Credit Score: What Is It and How Can You Improve it?

  • i think the biggest thing a college grad can do to help their credit is to pay their loans on time. I have a couple of friends who either through fault of the loan getting mailed to the wrong address or plain ignorance they didn’t pay their student loans after graduating for a couple of months. Despite being great with finances now, that 6 months of not paying the loan (and not telling the loan holder they couldn’t pay it either) still affects their credit 6 years later.

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