We often say that age is just a number and doesn’t matter unless you are active and doing well. The same isn’t true for everything. Certainly not for credit scores!
We hope you have heard about them and the impacts it has. Well, for those who don’t know much about it, here we are to explain you about credit scores and calculating it.
Basically, what is a credit score?
Credit scores are the numbers that most lenders refer to while giving a loan. They decide how are you going to pay the loans and tells about how clean is your past loan record. A good and decent credit score is essential to help you in any financial transactions. For further information please visit this site.
There are basically 2 types of credit scores available:
- Generic credit scores
- Custom credit scores
The generic type of credit score is commonly used by all the lenders and businessman to check your credit history and risk associated. You have the access to the scores across all the credit reporting agencies. A custom type of credit scores is developed by single lenders, who rely on previous credit history and the lender's portfolio along with other information of the candidate. This type of credit score is applicable to loans like mortgage loans, auto loans or lending etc.
There are few factors that you need to know to improve or take care of your credit history. Read on:
- Total outstanding debt
- Account type that you transact on
- Late payments made in total
- The age of the existing in use accounts
These elements form the base and mainly shape your credit scores. Now we know how important is a credit score and the importance to keep it good, for all financial lending’s and help when you really need. Do you know how your credit score is calculated? You score will be a 3 digit number, ranging between 300-850. The higher the number, better are your chances. Here we elaborate on what goes in calculating the credit score, have a look.