Checking your credit score is not difficult despite it seems like a difficult task. Credit scores are very important when it comes to getting loans, getting a credit card or a mortgage from a bank or lender. The first thing they look at is your credit scores. Credit scores varies depending on various factors. Having a good credit score level will bring many advantages and on the other hand having a bad credit score will bring many disadvantages and bring your chances down on getting loans compare to those who have a better score than you. That is why it is very important to have a good score and always try to improve this score.
What Is A Credit Score?
Credit score is a score which determines the accountability of the person while getting a loan, credit card or mortgage. The scoring system was created by FICO which previously known as Fair Isaac Corporation. The scores have 5 different ranges which all of them represents a level. The total scores ranges between 300 and 850, 850 being the best score possible to achieve. Scores lower than 580 is poor level, which means getting loan with higher interest rates and also being a risky borrower. Between 580 and 669 is fair level which is below average and most likely the lenders will approve the loans. 670 and 739 range represents the good level which is a little higher than average and it’s a good sign for the lenders. 740 and 799 is the ‘very good’ level which means you are very safe for lenders and it’s possible to get loans in much better terms. 800 and 850 refers to ‘exceptional’ level and it is the highest level to come. The best possible terms will be offered to the ones who are at exceptional level.
What Factors Effect Your Credit Score?
There are some main factors that affect your credit score. Most important factor that affects your FICO score is the payment history. It shows if you paid your credit accounts on time and has an effect almost 35% of overall score. Accounts owed is also a very important factor that affect your score. It is when a person has debts but it is calculated as the ratio of the money owed and available credit amount. It affects the overall score around 30%. Length of credit history, credit mix and new credit are the other factor affecting your FICO score.
How Can You Check Your Credit Score?
Now that you are informed about what is a credit score and how it is calculated, you can now learn how you can access to your score. First of all, the best option is to going to the bank which you are holding their credit card. Usually the banks are giving free credit score service to inform their customers. There are also other ways possible to check your credit score; Credit Wise from Capital One, Chase Credit Journey and Discover Credit Scorecard. Good thing about these places that they provide the service for free even though you are not their customer. Lastly, don’t believe that checking your credit score lowers it, it’s just a myth.