When buying a vehicle or purchasing a house, the lender usually uses something very important to determine what kind of loan you can get, and what the terms will be. The lender uses your credit score. So, exactly what is a credit score and how does it affect you?
Interpreting your credit score meaning is very important. It is not just a bunch of numbers, it is a digital explanation of how well you pay your bills, and if you pay them. It also tells a company how likely it is that you will pay them back or in other words, what kind of a risk you will be.
With a low credit rating, it is highly unlikely you are going to be walking out the door with your new car or the interest on it is so high, you will be paying more for the interest than you will for the car. By now, you are asking what is my credit score? and how can I find out more? Here are couple little tidbits that might help you out.
There are three main credit bureaus that lenders look to when considering your loan. Experian, Equifax, and TransUnion. Credit Bureaus are companies that compile numerical data on people, based on their past payment histories.
Credit scores range from 500 – 900. A score of 500 almost gurantees that you won’t be given the chance to buy that car, unless you can pay for it upfront.
When you look at a credit score, you are looking at your “buying” history. This history tells a lending company, how much money you owe to other people, if you have paid debt off, and any types of judgements or liens against you.
When you view your credit score, you will also notice who has been requesting it. This can be credit card companies, offering pre approved cards, or somebody you have asked to look at your score. Only one affects your rating. If you ask too many people to look at your score, it can drop quite a few points.