Why you Need to Know your Credit Score

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You may have heard about credit score, credit history, credit report and so on. If you haven’t paid much attention to these terms in the past, then sit up and take note. Because your credit score has the ability to make or break your application for credit. What is a credit score (credit rating)? It is a number determined by a credit bureau based on your credit history over a time period. Your credit history constitutes all the information regarding your credit habits, and a credit report is the document logging it.

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Why you Need to Know your Credit Score You may have heard about credit score credit history credit report and so on. If you haven’t paid much attention to these terms in the past then sit up and take note. Because your credit score has the ability to make or break your application for credit. What is a credit score credit rating It is a number determined by a credit bureau based on your credit history over a time period. Your credit history constitutes all the information regarding your credit habits and a credit report is the document logging it. Credit bureaux There are three major credit bureaux: Transunion Experian and XDS. Each has its own formula for determining credit scores. Hence you will have a different rating from each. Credit bureaux credit score ranges Range Poor Fair Good Very Good- Excellent Transunion 0-1000 0-614 615-729 730-821 822-1000 Experian 0-750 0-549 550-599 600-649 650-750 XDS 0-1000 0-698 699-719 720-759 760-1000 Lenders may look at your credit record from one two or more credit bureaux before deciding whether or not to grant you credit. Some fnancial institutions compile their own information regarding your credit habits. Every aspect of your credit behaviour is recorded and goes onto your credit record like when you pay a bill or take out further credit. Creditors upload information to the National Loans Register monthly which then gets passed on to the credit bureaux. Therefore your credit score changes all the time. Why do you need to know your credit score It infuences your ability to obtain credit and the best interest rates. You could be denied credit if you score low and if you do manage to obtain credit you could be charged high interest rates. Knowing how you score and taking proactive steps to keep it above par could mean the difference between getting your home loan or not. Depending on certain credit providers’

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business model an excellent credit score is 575. What impacts a credit score • The amount and severity of late payments • The type term and number of accounts • T otal debt • Outstanding debts • How often you apply for new cr edit including co-signing for a loan • Public r ecor ds such as administration or judgements etc. • Enquiries by lenders How can you improve how you score Dos Don’ts Make monthly payments on time Don’t miss any credit card payments Pay outstanding balances in full Don’t end up in court for late or non-payment Notify creditors immediately if you can’t make a payment Don’t take out further credit when paying off debt Keep credit balances low Don’t max out credit cards Close accounts you no longer use Don’t take on too much debt Pay of f debt closest to their cr edit limit frst Don’t move balances form card to card Check your credit report for errors Don’ t enquir e about cr edit unnecessarily So now you can see why knowing how you rate is so important. It infuences your creditworthiness and impacts on your ability to obtain credit and whether you will pay prime for interest or be taken to the cleaners. Please note that this article is for the purpose of conveying information only and not to be regarded as advice of any kind. LoanFinder SA is not a fnancial institution and do not offer fnancial advice. Be sure to consult your fnancial advisor before making any monetary decisions. SNIPPET • Revolving cr edit is bad for your cr edit scor e if it consists of most of your total debt TIP • Don’t use credit repair agencies DID YOU KNOW

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• A spouse’ s poor cr edit r ecor d could impact negatively on yours F ACT • Having too little debt can count against you as cr editors won’ t be able to determine your payment habits and therefore not trust you FUR THER HEADING OPTIONS: • Know your Cr edit Scor e. This is Why . • Why Knowing your Cr edit Scor e is so Important • Cr edit Scor es Rule When Appying for Cr edit • Don’ t let a Bad Cr edit Scor e Ruin your Chances of Getting Cr edit • How to Get Cr edit by Contr olling your Cr edit Scor e. • Contr ol your Chances of Getting Cr edit • Tips to Boost your Cr edit Scor e • This is Why you Need to Know your Cr edit Scor e

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