What’s The Highest Possible Credit Score and How To Get It?
You may ask this age old question. What is the highest possible credit score I can 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 may be especially important to business people who would want to borrow money to get a business or expand one. With a negative credit score, it is not only a business loan that you will have no access to. You may even be turned down when you apply for a car 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 big debts in all of them?
These will all determine just how high or low your credit score will be and whether you like it or not, these things are being recorded and filed by credit bureaus and credit reference agencies such as Equifax, TRansUnion and Experian. These three agencies are in charge of keeping tabs and recording 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 you want to know your credit score, you have to purchase the information via the Internet from these 3 agencies’ websites.
If you do have a bad credit score, do not fret because it is not yet the end of the world. Actually, credit scores may be improved if you have the drive to do it. Here are some of the factors that may 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 may just waste the money away.
3. Having a good credit history- People who have had past loans will have a better chance of getting a higher credit score. Much better than the people who are just new in the game of getting loans. However, these people should have also exhibited good credit history; otherwise, they will also have low credit score.
4. Applying for new credit-People who have applied for new credit in a period of time will have a lower credit score than someone who has applied just once. This is because, people who have applied at numerous banks are seen as people that are desperate for financial support. This means they may be a riskier than other people.
Also, some banks consider people who have applied in different financial institutions for a loan dubious and suspicious. So remember it’s important not to apply too many times.
Filed under: Business