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When you apply for a loan, creditors consider many factors, from the amount of money you need to your income level. Your credit score is one of their top considerations. To understand what a credit score is and how the number is calculated, consult the guide below. 

What Is a Credit Score?

Think of a credit score as a grade representing your financial history. An excellent score ranges from 800 to 850, while a poor score ranges from 300 to 579. Your number is based on numerous factors, including the length of your credit history, your total line of credit, the number of accounts you have open, the number of hard inquiries you’ve had, and your payment history. Creditors look at this score as a means of evaluating your financial trustworthiness to determine whether to give you a loan.

What Types of Actions Impact Your Score?

loanUnderstanding positive and negative spending habits is crucial to maintaining a favorable credit score. For example, making on-time payments toward your credit card is important. However, the amount you put toward your payments can increase your chances of seeing a score improvement. Rather than paying the minimum, opt to pay more when you can. 

Properly utilizing your accounts is just as crucial. Spending too much will decrease your available line of credit, which will negatively impact your score. However, not using the card at all will also make lenders believe you don’t know how to manage your money. Instead, designate your card for specific purchases, such as groceries or gas. Managing your spending will allow you to continue using your card without maxing it out. 

 

If you need to take out a loan to increase your credit score, contact the professionals at Coastal Finance Company in Savannah, GA. This firm is proud to offer in-house lending services, providing customers with the money they need quickly. Visit them online to fill out an application, and call the agency at (912) 303-9979 to discuss your needs today.

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