Credit Scores: The Power of a 3 Digit Number

Millions of people are denied the help they want or an item they want to purchase. Many don’t realize they are being denied because of their credit score. Others are aware they have poor or bad credit but don’t know how to fix it.

A credit score is something that everyone will have and most will be judged by. Companies look at a person’s credit score to determine if they will hire applicants, extend services to them and many other things. Having a poor or bad credit score can be the reason many people are not living the life they want to live.

Where is the Power in Those 3 Digits?

Most credit bureaus have their own mathematical equations used to calculate a person’s credit score but most mimic the equation established by the Fair Isaac Corporation (FICO). These formulas are designed to look at the repayment history and income and predict if they will be able to repay the loans or debts responsibly or if they will be a risk.

When a person has a poor credit score, it can be because they have a poor repayment history. A poor credit score can also come from too many debts and not enough income to pay the bills they have. Those that have poor credit scores will often find that most financial institutions are not willing to offer help in the form of loans and credit. This can be a devastating to someone that needs help.

Those that have a high or a good credit score don’t have the same concerns financially as those without. Having a high credit score can come from repaying all debts on time and having enough income to repay any debts. This is the history most financial institutions and companies look for. They want to see applicants that are not high risk.

Can a Credit Score Change?

Anyone that wants to have a more secure financial future can change their credit score from bad to excellent. Anyone with an excellent credit score can ruin their financial future with bad choices and lower their credit score to bad. There is nothing to stop anyone from changing their credit score if they want to.

To change a credit score from bad to excellent, a lot of work has to be done. There are many ways to do it and it will all take time. One of the first things that people should do to begin fixing their credit score is to start paying their bills on time. For those that have a lot of debt reported as unpaid, begin paying those debts off and having them corrected. People that have seriously flawed credit should consider consulting a professional and working with them to get their credit repaired.

Those that have good credit but horrible financial habits can quickly change their credit score. To maintain a good credit score, they should continue paying their bills on time and not get a lot of new debt. Incurring a lot of debt and being overwhelmed with bills is easily done. The best way to avoid ruining a credit score is to be aware of what’s being reported to the 3 major credit bureaus. If there is an error that goes unnoticed, it can lead to credit mayhem.

Anyone that has an interest in their credit should get a free credit report from all 3 major credit bureaus each year. Knowing what’s on a credit report can help people become prepared for the challenges they may face because of it.

Apr. 25 14'

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