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What is a Credit Score?

Posted by Percy A Lowe on September 18, 2013 at 5:00 AM

A credit score is a number that lenders use to estimate their risk if they should choose to lend you money.

Experience has shown them that people with a high credit score are usually going to pay them back with little or no problems. Conversely, borrowers with lower scores tend to be a higher risk to them and tend to be more likely to pay late or perhaps stop making payments altogether.

Credit scores (usually) range from 340 to 850 points. As your score climbs, lenders tend to offer lower interest rates and better terms. Conversely, the lower your score dips, the more likely you are to have higher interest rates, higher fees, tougher terms, and potentially even get declined by the lender altogether.

Notice: I said (usually) the range is from 340 to 850. That depends on which company scores you are looking at. Because behind the scenes each credit bureau has their on scoring algorithm. That is explain in my workshops where you are able to see how each bureau handles your scores. Most, important is that which you never hear talked about is the score reaches to 990. But since we have two scoring companies battling to be the primary scoring company you as a consumer doesn't know who issuing the scores to te lenders. That puts you at a disadvantage but put the lending institutions at the advantage over you. 

This is where some good credit education comes in hand to leverage the playing field for the consumer. So, it is very important that you deal with a credit company are individual who claims they can help you acquire a better credit report card. With some better scores to become lendable to with out having high interest rates and having to pay huge deposits. 

You would like to find someone are company that understands how this scoring model works. Most of that can turn the leverage around in your favor. Not tell you what you need to do but being able to guide and instruct you what you need to do. Most of all have a awesome understanding of the way building credit works. That gives the consumer all the control and decision making when it coems to rebuidling their credit scores. 

 

Categories: Credit Education and Restoration

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