If you remain unclear about what a credit score is, you are not alone. Millions of folks around the country have only a vague sense about the importance of a good credit score, and its impact on their financial life. To offer some guidance, today’s blog will address five basic facts about credit scores, and give you a solid introduction to the ins and outs of building a good credit rating.
1) What a credit score is
Simply put, your credit score is a numerical score that assesses your level of financial trustworthiness. It basically grades you based how much you have borrowed, from whom you have borrowed, and the rate at which you repay your debts.
2) What a credit score does
Your credit score can be viewed by any company from which you are seeking to borrow money; these include banks, credit card companies, car dealerships, and mortgage companies, to name a few It can also be viewed by other parties, including prospective landlords and employers. All are looking at this snapshot of your financial life to determine the level at which you can be trusted to borrow money in the future.
3) The impact of a credit score
The higher your credit score, the more likely a company or business will be willing to loan you money, and the more reasonable their interest terms will be. The lower your credit score, not only will you be less likely to be able to borrow enough money to purchase the items you need, but the interest rates you will be charged to obtain these loans will also be higher.
4) How you can find your current credit score
There are three major credit rating agencies that collect financial data: Experian, TransUnion, and Equifax. You can contact these companies independently or obtain your financial information from all of them – free of charge – at www.annualcreditreport.com.
5) How you can raise your score
While we cannot give specific financial advice, J.G. Wentworth prides itself on doing our best to educate both current and prospective customers; as such please see our earlier blog about how to raise a credit score, which discusses some basic principles of raising a credit score, such as using your credit card wisely, paying off debts on time, and establishing a solid financial reputation for trustworthiness in all loans and purchases.
Want to learn even more about credit scores? You can also find other J.G. Wentworth blogs devoted to credit scores here and here. And always remember that if you are having trouble paying debts and establishing a good financial reputation, but have money that is expected to come to you in the future from structured settlement or annuity payments, you may be able to sell these payments and get that cash sooner, rather than later. To learn more, call one of our customer representatives at 877-217-4713.
Please note that nothing above is meant to provide financial, legal or tax advice. You should meet with appropriate professionals for such services.