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Credit Score Ratings: What Does It Mean And Why Should I Care
Very few people know about something that has a huge impression on their life, their credit score ratings. They often learn about it after it is too late and pay dearly for it.
You realize you begin forming your credit rating as soon as you become a regular consumer which for several people is during High School and for most is at least by the time they enter college. The trouble is that they don't appreciate what this unexplained thing is all about and make decisions that they feel sorry about financially. It seriously is a shame that more of this financial mumbo jumbo isn't taught to people in high school. The problem is that it is not just a problem of young people and so their teachers might not have the foggiest either.
So what are credit score ratings? Well, it is a number that is used by potentially crucial people in everyone's life. It is used by banks, by credit card companies, by mortgage lenders, by landlords, and by almost everyone else who can stand to benefit from associating themselves with financially trustworthy people. So it is a number that attempts to evaluate how well you use your money. Unfortunately there are things that you can do that don't necessarily reflect on your level of responsibility fiscally but that will ruin your score.
For example applying for too many credit opportunities (i.e. to take advantage of the 10% discount that you get on a purchase for doing so, or to get a free t shirt in college - totally not worth it!). An extra thing that will kill a credit score is being late on anything. You can just do it one time and take a big hit in your score and numerous people simply don't understand the kind of result it will have on their credit score.
Another thing is disputed charges. Often a person will be wrongly charged for something or have other disputes about a fee and end up not paying. Chances are the amount of money in question is not worth the damage that it will do to the credit score and the resulting extra costs that this incurs.
So what are the advantages of having an admirable credit rating ? Well people are more prepared to loan you money and on better terms (i.e. lower interest rates, cash back deals, interest free periods, etc.) You are also looked upon more favorably by landlords and other essential service providers. You get better deals on insurance, better interest rates on home mortgages, car loans, and on.
Take my advice and be very conscious of your credit score and work to improve it. Pay your bills on time all the time! Get your score regularly and make sure that it contains no errors.
Borrow only when you need to do and in amounts that fit your requirements. Keep track of your spending and spend within your ability. Don't use credit cards unless you are going to pay off the balance each month or you are able to at least make the minimum payments.
By paying your bills on time, not applying for every credit card obtainable, and keeping track of your credit score ratings, you will have advantages that somebody with little or no credit rating possibly will never understand.
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