First of all, a credit score is a statistical or numerical analysis of a specific person's creditworthiness. This means that a person's borrowing and repayment records are compared to come up with a score that will eventually be used as references for future transactions.
Who uses these credit scores?
Credit scores are mostly used by banks and lending institutions to evaluate the risk involved when lending to a borrower. This is usually used during the processing of a loan, computing for interest rates and determining the credit limits for credit cards.
Identifying free credit scores
At present, the internet is host to various companies that offer services in the form of giving free credit scores. But, the truth about these sites is that some of them offer free scores but lure you into paying for your records.
In part, there are really no free scores that can be obtained. However, you are entitled to have a free credit report. To put it simply, companies derive scores from your borrowing and repayment history. This is what those companies in the web are charging you for.
Monitor your scores without paying
At present, there are a couple of sites in the web that offer glimpses of your scores. Although these are not as comprehensive as the paid ones, it still helps you see your scores. By using their services you can monitor and take steps in improving your scores. But, you may be asking, why are they doing it for free? This is because they are tied up to the credit industry and they make money not by charging through advertising.
Tips on improving credit scores
The free sites advice people that closing a credit card is definitely a no-no. This is because causes out utilization rate to fluctuate. A person's utilization rate is the amount of actual credit available that you are using. By closing a credit card, your utilization goes up while your scores go down.
Instead of closing a card, it is more advisable to just cut out on other cards. The goal is to prevent fraudulent and over limit usage.
If you intend to maintain a good credit standing, then it is advisable to keep a good credit score. There are various resources available online that can help you get the score that you want. All you have to do few clicks. Remember that you will never know when you will need the extra borrowing capacity.
Who uses these credit scores?
Credit scores are mostly used by banks and lending institutions to evaluate the risk involved when lending to a borrower. This is usually used during the processing of a loan, computing for interest rates and determining the credit limits for credit cards.
Identifying free credit scores
At present, the internet is host to various companies that offer services in the form of giving free credit scores. But, the truth about these sites is that some of them offer free scores but lure you into paying for your records.
In part, there are really no free scores that can be obtained. However, you are entitled to have a free credit report. To put it simply, companies derive scores from your borrowing and repayment history. This is what those companies in the web are charging you for.
Monitor your scores without paying
At present, there are a couple of sites in the web that offer glimpses of your scores. Although these are not as comprehensive as the paid ones, it still helps you see your scores. By using their services you can monitor and take steps in improving your scores. But, you may be asking, why are they doing it for free? This is because they are tied up to the credit industry and they make money not by charging through advertising.
Tips on improving credit scores
The free sites advice people that closing a credit card is definitely a no-no. This is because causes out utilization rate to fluctuate. A person's utilization rate is the amount of actual credit available that you are using. By closing a credit card, your utilization goes up while your scores go down.
Instead of closing a card, it is more advisable to just cut out on other cards. The goal is to prevent fraudulent and over limit usage.
If you intend to maintain a good credit standing, then it is advisable to keep a good credit score. There are various resources available online that can help you get the score that you want. All you have to do few clicks. Remember that you will never know when you will need the extra borrowing capacity.
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