The unpredictable economy has jobs and savings on the decline, while foreclosures and bankruptcies are on the rise. Economic misfortunes can leave your credit score at a sickeningly low number. Although it may take a while to get your credit back to where it was pre-economic crisis, it doesn't take long to start seeing improvement. By making wise financial decisions, you can change your economic fate and start looking forward to a brighter financial future. Read on for a better understanding of what contributes to a bad and good credit score, as well as helpful tips for improving your score.
Understanding Your Credit Score
A credit score is what lenders look at to determine whether or not you are eligible for certain loans. The number is determined based on your payment history from previous credit cards, car and home loans, and any payment in general that is reported to the credit bureau. Credit scores range from 300 to 850, with 300 being the lowest and 850 being the highest. Lenders typically look at anything below 500 as risky and having a score in this range will likely result in either denial, or an outrageously high interest rate. Anything above 700 is considered to be a good credit score. Individuals with high credit scores will easily be approved for most loans and most likely be granted a low interest rate.
How to Improve Your Credit Score
If you are one of the victims of this tumultuous economy, it is likely your credit score could use a little TLC. Here are some helpful tips you can start using today to improve your score.
- Pay Down Debt -- Excessive debt can negatively affect your credit score. If finances allow, try to pay down your debt with any extra funds you may have.
- Significant Errors -- Check your credit report for any errors. Don't let these mistakes go undisputed as they can have a pretty hefty impact on your score.
- See a Credit Counselor -- If you are having trouble making ends meet and paying your credit cards on time, seek the financial advice of a credit counselor. They can help you figure out a payment plan that works for your budget and can get you on the right track to restoring your credit.
Follow these steps along with a budget that fits your individual financial situation and watch your credit score slowly but surely rise from embarrassingly low to impressively high.
Jesslyn Parker - Jesslyn Parker is a full time hairstylist, student, and single mom. Although hairstyling has been Jesslyn's profession for the past 4 ...
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