Recognizing The Ins And Outs Of Credit

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Dec 26 2019
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Credit can be daunting for everyone, it represents the stress associated with making payments, developing a budget, and a serious level of adult responsibility. What’s even more daunting than just living with credit, is understanding the importance of it. How does your credit score get calculated? Why does this number matter, and what does it mean? How can I improve my credit? These are all questions all of us who’ve gotten that new card in the mail. So how do we recognize the ins and outs of our credit score?


What is a good credit score?

If you’re curious about what a good credit score is, you should be. It greatly affects your ability to acquire all sorts of assistance from your credit company, which we’ll touch on later.


Generally, credit ranges are as follows

  • 300 – 579 Very Poor
  • 580 – 669 Fair
  • 670 – 739 Good
  • 740 – 799 Very Good
  • 800 – 850 Exceptional


If you’re unsure of what your credit score is, you can easily look up one of the credit reporting agencies. You’re free to request a credit report once a year without it affecting your current credit rating. Continuous checks to your credit can take a hit on your score. If keeping up with what hits your credit and adds to it is something, you’re interested in looking in detail, Blaine has an article that will help you understand your credit report. It breaks down the ins and outs of credit in a large amount of detail.

 Ins and Outs of Credit

What hurts my credit?

Most of us know that missing credit payments is bad. Although, it can be a lot worse than you might think. If you think about it, if you’re missing your credit payment 3 times a year, you’re failing to make your payment 25% of the time. That looks bad to a lender who knows historically you might be able to make your payments. This gets represented as a hit to your score. Not just failure to make payments lowers your score. If you tend to run a larger deficit on your credit, the higher you are to maxing out the lower your score will be.


Credit has a max limit that can be based on emergencies, if you’re just an emergency away from being unable to make your payment this might look bad also. As mentioned earlier, if you’re constantly running checks on your credit score, this is going to take a toll. Everything from a car dealership to a cash loan facility will run a credit check. It makes sense it might look bad if you’re constantly checking your credit to borrow more.


How do I get good credit?

The simplest explanation of obtaining a good credit score is essentially doing the opposite of the above points. Make your payments on time, don’t approach maxing out your cards, and don’t go through services that run credit checks continuously. Reading and understanding your credit report are also important.


You’ll be surprised at the fact that there may be errors on your report that you can contest. The biggest thing to remember here is patience, if you’re frustrated that you currently have a lower credit score all is not lost. Keep up with your payments, work at paying it off, and you’ll be among the ranks of those who have a good credit rating.

Accounting Report Credit Card

Why does it matter?

Even though it’s a pain to be wary of our spending to keep our credit score in good health, it matters. That number which might cause you a headache thinking about really changes the amount of freedom you’ll have in the future. A credit score is a record of how you behave with lending, are you responsible enough to handle having to pay portions of your payment back?


Before you buy a car, they will run a credit check. Before you visit your bank for a mortgage, they’ll look at your credit. If you’re looking to take out a line of credit, they’re going to look at your current credit score. Having a car and owning property are probably the two biggest concerns in a lot of people’s lives. Having something to get around with is vital, and having your own home is a big dream for a lot of millennials already going through a difficult era of obtaining their own property.


Credit matters, and that sucks. But you don’t have to suck at having good credit, if you’re looking into understanding your credit, you’re on the right path. If you already have good credit, great. If you aren’t lucky enough to be among those who do, don’t worry, it’ll become an attainable goal if you continue to work away at it.

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