The ABC's of Credit Scores

By
Real Estate Agent with Joy Daniels Real Estate Group, Ltd.

 

Credit plays a role in everything from buying a home, to signing up for cell phone service or utilities, to getting car insurance. A credit score is a snapshot taken by the three leading credit bureaus, TransUnion, Equifax and Experian, that allows lenders to determine whether or not you will be extended credit, the amount of credit and even the terms (interest rate, loan amount, repayment schedule).

What is a credit score and how is it calculated?

A credit score is a number between 300 and 850 that is used to predict how likely you are to pay your bills. Many of the companies with whom you have a loan or a line of credit report back to the three credit bureaus information such as whether you pay on time, your credit amount, etc. Your credit score is calculated from this personal financial information. The higher your credit score, the better the credit terms you will receive. The lower your score, the higher the interest rates you may have to pay. Generally, scores over 700 are considered excellent while scores below 600 are considered poor.

You are eligible for one free credit report per year from each of the three credit reporting agencies. Take advantage of this opportunity to monitor your credit report and ensure there are no mistakes or surprises with your credit.

How can I improve my credit score?

Although there are no quick fixes when it comes to improving your credit score, you can take steps to rebuild your score over time:

·        Continue paying your bills on time — your payment history matters.

·        Don't max out your cards or even run the balances up high.

·        Hold off on applying for new credit or cancelling an old card, since length of credit helps.

·        Pay down high balances, but don't just transfer debts among several lenders.

·        Settle any collections or past due accounts that you possibly can.

·        Dispute and resolve any inaccurate items in your credit report. The last two years of your credit history are the most important

 

Credit scores affect your life — beyond just mortgage interest rates.

Credit scores are often used in determining prices for auto and homeowners insurance. Employers have also begun using the scores as part of background checks when making hiring decisions. The practice of using credit scores in nontraditional ways is expanding. It's more important than ever to educate yourself about credit. If you have more questions, email Richard Hirsch, Mortgage Master, Inc. rhirsch@mortgagemasterinc.com and he can help you find local resources to provide you with credit counseling and more in-depth information.

 

Posted by

Joy

Joy Daniels, GRI, ABR, CSP, e-PRO
JOY DANIELS REAL ESTATE GROUP, LTD
2793 Old Post Road, Suite 200
Harrisburg, PA  17110

(717) 695-3177  office - Call TODAY and let me help you find your dream home!

www.joydaniels.com

Joy@JoyDaniels.com - Email TODAY and let me help you find your dream home!

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Topic:
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Groups:
Advice for Buyers
Realtors®
Mastering Buyer Agency
South Central Pennsylvania Realtors
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Tags:
experian
equifax
transunion
credit bureaus
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Comments 11 New Comment

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Rainmaker
525,699
Don Sabinske
Sabinske & Associates Inc.
Don Sabinske, Sabinske & Associates Inc.

Nice informative post for your clients.  BTW, I am self-employed, my score is 850.

October 06, 2012 03:10 PM
Rainmaker
956,800
Endre Barath, Jr.
Realtor - Los Angeles Home Sales 310.486.1002
Berkshire Hathaway HomeServices

Joy, good information for both Buyers and Sellers to give them a better understanding of the Credit Scores!

October 06, 2012 11:32 PM
Rainmaker
560,962
Joy Daniels
Joy Daniels Real Estate Group, Ltd.

That's a VERY impressive credit score Don - Mine is 795. . . I just can't hit that 800 mark!  :)

 

Thank you Endre.  I think Credit Scores are often misunderstood!

October 07, 2012 06:26 AM
Rainer
157,019
Dave Sullivan
The Real Story on Your Credit Score - TheCreditGuy
www.TheCreditGuy.TV

Joy well done not many understand how important this is... keep up the good work!

January 07, 2013 09:28 AM
Rainmaker
560,962
Joy Daniels
Joy Daniels Real Estate Group, Ltd.
Thanks Dave. As professionals I think it's really important that we are able to share this kind of information with our clients.
January 07, 2013 06:50 PM
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Joy Daniels

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