You may not have heard of the credit score scale however, it is something that you should learn and understand. Basically the scale is a ranking system used by banks and other lenders to determine your credit worth or your capacity to repay back the money you want to borrow. The banks use this system to qualify you for loans and other financial products that you apply for.
In recent times the credit score has become a very important number because of our greater dependence on credit and the current state of the economy. Before the financial downturn the score did not play a influential as it does now. In those days it was very easy to get a loan as the banks were literally giving them away. Today, you will find the loan market far more challenging and difficult. There are now tighter constrains and banks are very choosy to whom they lend money to. When the economy was good a credit score of 620 would qualify you for very good deals on interest rates. However, today that score would not get you very much. Today, a credit score of 740 is considered to be the level that people need to attain to have a chance to qualify for the best deals.
It is very important that you regularly check your score and see where it sits on the credit score rating scale. In this way you can see if there are any major changes. The difference of 100 points can mean paying extra thousands of dollars on a long term loan. You can check your score by contacting the leading big 3 credit bureaus which are Trans Union, Experian and Equifax. There is a fee for this however, there are on-line services that can provide you your scores for free. It is also advisable to obtain a copy of your credit report. This report is also provided by the credit bureaus and is free of charge. The credit report contains information relating to your credit history. Check the report to ensure the contents are accurate, up to date and if there is any evidence of identity fraud. If there are any details that are wrong then, report this to the credit bureau immediately.
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