Your credit score affects just about every aspect of your life, from the interest rates on credit cards to your job prospects in certain fields. As important as this number is, however, many new borrowers aren’t sure how to keep their credit rating up. Understanding the credit rating system can help you stay on track financially and may even help you avoid needing debt relief later.

Answers to Common Questions About Credit Ratings

What is a credit score for?

Essentially, credit scores are used to determine how trustworthy you are based on your past financial behavior. Lenders generally assume that those with higher scores are a safer investment, since they’ll be more likely to pay back debts on time.

What factors influence my credit score?

A history of on-time payments is the most important factor influencing your credit score, followed by the amount of available credit you have. Your debt-to-income ratio and whether you’ve sought debt relief in the past also has an impact on your score.

How do I find out my credit score?

The credit reporting agencies are required to give everyone a free copy of their credit report every year. To safeguard your reputation, it’s a good idea to request a copy, look it over for errors, and report any mistakes to all three bureaus immediately.

Will filing for bankruptcy permanently ruin my credit?

While filing for debt relief will cause an immediate drop in your score, missing payments and defaulting on debts can be much worse. Most borrowers who file for bankruptcy find that they can start rebuilding their credit right away, eventually achieving a higher rating than they started with.
 

If you’re struggling to keep your head above water, turn to Greg Dunn Bankruptcy and Debt Relief Attorney to blast your debts away. Over his 25-year career, he’s helped over 12,000 families throughout Hawaii start their financial lives over again. Visit his website to start exploring your debt relief options, get more financial tips and advice on Facebook, or call (808) 524-4529 to schedule a consultation today.