When you first see your credit score, you may not have any idea of what it really means. It is just a number and everyone has one. But what does it say about you and your credit?
Credit Score: What the Number Means.
If you’ve checked your credit score lately you may have noticed that the number is between 300 and 850. The lower the score. the “worse” your credit history looks.
If you have a score of 720 or above, congratulations. You have a score to be proud of. This means that when your numbers (amount of loans, number of times late and overall amount of credit out there) were calculated, you scored well.
Getting Your Credit Score.
Every person is entitled to a free copy of their credit score and the information leading up to the calculation each year. No matter what your status or situation as far as credit goes, you should request a copy and find out your score.
It can be beneficial to know if you have any bargaining room for things such as an interest rate on a car or home. Most people want to check these reports to make sure that an identity theft has not occurred.
Problems and Corrections.
Sometimes when you see the report, you notice a mistake that is holding your score down. It may be that you called and canceled a credit card, but it isn’t marked on the report. You can call or write to the company and have this situation remedied. If you notice charges that you haven’t made, or credit cards that you haven’t opened, you immediately need to report these things. You may be the victim of an identity theft.
My Score is Low – Now What?
There are several options for improving your credit score. Aside from closing some of your unused accounts (especially if you haven’t had them for a long time), you can also call and ask that your credit limits be dropped down to lower amounts. If you are in a difficult situation and find yourself struggling to pay your credit card bills, there are other solutions.
Debt Consolidation Loans.
Instead of struggling to make several different checks to a variety of lenders, you can place all of your debt in the hands of one creditor. This is called consolidation and for many people, this is the solution they have been waiting for.
Typically, when you have one loan, the amount you pay each month is less than the minimum payments you have been paying. You can work hard to get the amounts paid off and you can pay extra to get out of debt more quickly. If your score is lower than you might like, debt consolidation loans are might provide a solution to get your credit score back on track.
Working with Creditors.
If you are really in a sticky situation, you can make arrangements to settle your debt for less than you owe if you pay the rest all at one time. While this isn’t the easiest solution, it is an option for someone that is persistent. You can even find a company that will work with you to negotiate your bills with a variety of creditors.