What Determines a Credit Score pt 1

scoreHere is some basic information on what you need to know about credit scores and what goes into determining your credit score.

What is responsible for determining my credit score?

Your credit score has become a very important focal point for a variety of things. Your score is now the main determiner of details like whether or not you will be approved or denied, if you will need to make a deposit or a down payment, whether you get favorable or unfavorable conditions for things like a mortgage or loan, and many other things. Your credit score can determine your auto insurance premium, deposits for utilities, for cell phones, renting an apartment or house, or even your eligibility for a job. If your score is less than stellar, life can be made very difficult.

Many employers are now looking at the credit reports for potential employees before they hire them. For this reason, you can likely see how your credit and your credit scores are going to play a really important role in nearly every aspect of your life. If you have bad credit, you could end up paying higher monthly payments, higher interest rate and higher premiums on many different things throughout your life including credit cards, loans and mortgages for example. There are a wide variety of different factors that can help to contribute to the determination of your credit score, and learning about them is an important part of understanding the effect that you have over your credit, and the effect that it has over you.

Whether or not you pay all of your bills when you are supposed to is going to be one of the biggest and most important aspects in determining your credit scores and credit report information. Most companies extending credits are going to report that information to the three major credit bureaus on a fairly regular basis. If you make any late payments on these bills, then that is absolutely going to have a negative effect on those credit scores as a result. The more recent that these reported late payments are, the higher the impact is going to be on your credit score as a result. Lending banks consider late mortgage payments to be more severe than late payments on credit cards, and so they often punish homeowners that have late mortgage payments accordingly with lower loan amounts as well as higher interest rates.

Your credit report is going to list any charged off accounts and collection accounts that you may have had recently or in your history. Having accounts such as this in your credit report is absolutely going to have an adverse affect on all three of your credit reports and scores, and your ability to get credit or loans in the future accordingly.

Continued in Part 2…

Photo Credits: polyscene

Originally posted 2009-11-18 03:04:23. Republished by Blog Post Promoter

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