Credit scores can be a scary thing when you’re getting set to apply for a loan. It’s almost as if these very secret computers check off everything you’re doing with your credit, ready to put a big “denied” stamp on any application you’ll fill out. Despite what you may have heard there are some things which don’t directly affect that number.
According to CreditScoreQuiz.orgopens in a new window developed by the Consumer Federation of America (CFA) the age…of the person applying…doesn’t have a bearing on your score. But it may if the age of your credit history is young. In other words, if you’ve not applied for a loan before and don’t have an established credit history, it will be hard to get good rates. You need to have borrowed money to borrow money.
This next one may seem a bit unusual…but you don’t have to be educated in finances to have a good credit score. The rating agencies don’t care if you know about consumer debt, how you feel about debt or even if you don’t have the resources to pay it back. But if you miss payments, your score will go lower. The number of missed payments and amount owed does impact your score.
Carrying a balance doesn’t always mean a lower score. However, if you carry a high balance, in relation to your credit limit, your score will go down.
Relationships such marital or family status aren’t included in your credit score. But if you have joint accounts, if you’re a co-signer on student loans, or car loans, watch out—all can lower your score. And beware that if you have authorized users on your accounts, it can also negatively affect your credit score.
Buying a car…checking for several different types of financing in a short period of time…won’t lower your score. Multiple credit inquiries during that time don’t affect the credit score. But don’t forget to make payments on time once you’ve made that purchase.
Your credit score will take a hit if you have a personal bankruptcy. There’s no way around that. But don’t go to a “credit repair” company. They’re unlikely to do much more than take money that would be better used to pay debts. Keep the middle man out of the process. Contact your lenders yourself, and work out some payments. Call your credit union for advice too.
Here’s some advice in dealing with your credit score. Check it out several times a year for inaccuracies. You can do that through your loan officer at the credit union. Or you can obtain free credit reports from the three reporting agencies: Experian, Equifax, and Trans-union.
And keep your credit score steady with these tips. Make sure your payments for all your loans are on time. Keep those balances under control. And finally, as easy as it may seem to open accounts—avoid the urge. You’ll benefit from the longer you have credit, not from opening several accounts at the same time.
If you want to learn more about your credit score take the CreditScoreQuiz.orgopens in a new window which was put together by the Consumer Federation of America (CFA) and VantageScore Solutions.