To get and keep a good credit score, pay attention to your credit report.
Your credit report shows information about how you have used credit, such as how much credit you have, how much of your available credit you are using, whether you have made your payments on time, and whether anyone has sent a loan you owe
to a debt collector.
A credit score is a number that is used to predict how likely you are to pay back a loan. Your credit score starts with the information about you from your credit report. A mathematical prediction formula is applied to this information about you from your credit report. That prediction formula, which is called a scoring model, creates a number which is your credit score. You probably have numerous credit scores.
Credit scores are used by companies to make decisions such as whether to approve a mortgage at a certain rate or issue a
credit card. Different lenders use different scoring formulas so your score can vary from lender to lender. Usually a higher score
makes it easier to qualify for a loan and means a better rate of interest. Most scores range from 300-850, although there is one
scoring method that uses a range from 501-990.
To get and keep a good credit score –
- Pay all your loans on time.
- Make sure information in your credit report is correct.
- Don’t use too much of the credit that is available to you.