You may ask this age old question. What is the highest possible credit score I have the ability to get? Well, the answer is a little complicated, so lets get at it. First of all a credit score is an important part of your financial profile. This is because a credit score will determine whether lending institutions and banks will let you borrow money or not.
This is especially important to people who would want to borrow money to put up a business. With a bad credit score, it isn’t only a business loan that you will have no access to. You can even be rejected when you apply for a vehicle loan, a school loan, a housing loan and even a credit card.
A credit score is a direct result of your total credit history. It is determined by the way you have handled your current and past debts and credits. Do you pay them early and regularly? Have you had any late payments? Do you have lots of credit cards and have large debts in all of them?
These will determine just how high, or low your Credit Score will be and whether you enjoy it or not, these things are always being recorded and filed by credit bureaus. Also by credit agencies such as Equifax, TRansUnion and Experian. These huge three agencies are in charge of keeping track and recording all the credit histories of people.
In fact, in the USA, Americans are given a free credit report every year by these three agencies. However, credit scores are not part of it. If people want to know their credit score, they’ve to purchase the information via the internet through these three agencies’ websites.
If you do have a bad credit score, don’t fret because it is not yet the end of the world. Actually, credit scores may be improved if you’ve the drive to do it. Here are some of the factors that might affect the credit score.
1. Pay your bills on time- One of the factors that affect a credit score is the way you pay your bills. People who pay their bills on time are seen as more responsible, trustworthier, better at financial transactions and are more able to handle their money. Thus, they are good candidates for business loans and credit loans.
2. Credit card handling- The way you handle your credit cards and your spending habits also affect your credit score. The people who have maxed out their credit cards and have not paid their bills on time, will certainly have lower credit scores. This is because people who spend more than they should are not good candidates for a loan because they might just waste the money away.
3. Having credit and a good one- People who have had loans in the past have superior chances of getting a higher credit score than people who are just new in the game. However, these people should have also exhibited good credit history; otherwise, they will also have low credit score.
4.Making application for new credit-The people who have applied for new credit in a certain period of time, will have a lower credit score, than the ones who have applied just once. This is because, people who have applied in a lot of banks are seen as desperate for financial support and may be a riskier subject than other people.
Also, some financial institutions think people who have applied in different bank for a loan dubious and suspicious. So remember not to apply too many times.