Good Credit Score

What Is Credit Scoring?

Credit scoring is the method that prospective lenders, other potential creditors, and sometimes even employers use to determine your financial dependability, credibility, and even how responsible you are with your life. The average American credit score is about 650, so that is a good place to start; most creditors look for something on or about what is considered to be the national average credit score. If you are near or even above that 650 mark, you can rest assured that you are in good hands, financially at least.

Keeping a Good Credit Score

Keeping a good credit score is about staying up on your bills and other financial obligations. Almost every financial aspect of your life can affect your credit score, including any savings and checking accounts, utilities that are billed in your name, or even your lease or rental agreement.

Credit Cards

Credit cards are just one of many ways that people go about getting and maintaining a good credit score. In essence, you are eligible for credit as soon as you turn the legal consenting age of 18. Many people start out building good credit by obtaining a credit card and using it while continuing faithfully to put at least the monthly payment amount towards the balance. There are pros and cons to this; the first is that if you should suddenly become unable to make your monthly payments, you are beginning to negatively affect your credit score.

Credit cards and other financial obligations help boost your credit score, when paid on time.

Accounts

Savings and checking accounts, especially credit union accounts, are an excellent way of building good credit if you about it the right way. The worst thing that you can do to your good credit score is to open a checking account and start writing bad checks; not only can that get you into legal trouble but it can get you into real financial trouble as well. When you get a checking account, you often get a debit card as well; many times these debit cards have the Visa or Mastercard logo on the front. While this is not an actual credit card, debit cards are another good way of using your checking account to build good credit.

Bills

Paying bills on time are also a good way to improve your credit score. If you think about it, bills are an informal extension of credit to you; by paying your bills on time, you are indicating to the company and the credit bureaus that you care about your debts, and are working to stay up on them. What else can that lead to, but a good credit score in the end? Some of the bills that you might have now that paying on time can help you get the good credit score you need are:

• Electric Bills
• Cellular Phone Bills
• Car Payments
• House Payments
• School Loan Payments

Vehicle or Home Loans

While home loans can be a bit difficult to obtain with little or poor credit, there are some car dealerships out there that do their own financing that will help you get a vehicle off of the lot. Paying your loan payment on time every month is an excellent way to establish good credit or repair credit that needs help. Inquire how often your lender reports to the credit bureau to get an idea on how long it may take you to build or repair your credit.

Living Without A Good Credit Score

While having and maintaining a good credit score is extremely important in life, know that it is not everything. Plenty of people out there who failed to protect their all-important credit are able to get home loans, car loans, credit cards, and bank accounts just fine. There is no denying that having a good credit score is a great deal less expensive in the long run as far as interest rates and other things go, but there is life after bad credit.

Credit Report

The three major credit reporting agencies are Equifax, Experian, and TransUnion. You are entitled to one free credit report each year, so be sure to check your credit report annually for errors or strange charges.