Black Friday

Top 5 Credit Score Tips
Find out how to check and improve your credit score

Here are our Top 5 picks for the best cruise providers...
  1. Discover.com
    Discover offers FICO credit scores for free, which is used by 90% of top lenders. Discover is fast and easy to sign up to.
  2. Experian
    Experian are one of the biggest names in Credit Scoring, they offer many services including checking your score for free.
  3. Credit Karma
    Check your credit score for free and also get help with your taxes - there's a lot that Credit Karma offers.
  4. Free Score Online
    FreeScoreOnline offers a free credit check for all 3 bureaus, a very useful tool to have.
  5. Transunion
    TransUnion offer credit scores and credit reports as well as free identity protection, saving yourself from nasty surprises.

Top 5 Credit Score Tips: What They Mean, How to Find Yours and Ways of Improvement

We have all heard of the term “credit score”. However, you might be surprised to learn that very few consumers actually follow this metric on a regular basis. The fact of the matter is that these scores can impact your ability to purchase a new car, to obtain a first-time home mortgage and even to obtain a basic loan. In order to better appreciate how you can improve your current rating, it is a good idea to take a look at this critical concept in greater detail. You can then take the appropriate steps when the time is right.

What is a Credit Score?

We can think of a credit score as an independent rating which essentially determines how much a risk you represent in terms of failing to pay back any money that you intend to borrow. Keep in mind that this is not only referring to loans. You will be unable to obtain a credit card if you have a poor rating. These scores are obtained by analysing several variables:

  • You payment history
  • If you have defaulted on any previous loans
  • How many inquiries have been made in order to obtain a loan (and the associated number of denials)
  • Any negative feedback provided from lenders in the past

According to the latest statistics, the average credit score in the United States is 675 (between a range of 300 to 850). We can see that a credit score essentially represents your purchasing power as well as highlighting the chances that you might fail to make the appropriate payments if a firm chooses to lend you money. It therefore stands to reason that higher scores will provide you with a greater deal of financial freedom. Let's now take a look at how you can determine yours.

Obtaining a Current Credit Score

There are three major agencies within in the United States which will provide you with a current credit score:

  • TransUnion
  • Experian
  • Equifax

The good news is that it is actually much less complicated than you may believe to obtain an accurate reading. The first step is to navigate to the website of any one of these agencies. You will the need to supply basic information such as your name, age, address, and a valid email. You might also be asked to provide additional details (depending upon the agency). Once the appropriate data has been compiled, you will be sent a credit report in order to see where you stand. This brings us to the final section of our article.

Improving Your Existing Credit Score

Let's assume that you scored fair to poor. This tends to range between 580 to 669 (fair) and 759 and below (considered to be poor). What steps can you take to get back in the good graces of your lenders? There are a number of useful recommendations which should be taken into account.

The first involves a good deal of common sense. Never spend outside of your limits. Do not request a loan unless it is absolutely necessary. Limit your use of credit cards and bring cash when you are out and about instead. If you do use a credit card, make certain that the outstanding balances are paid back in full at the end of every monthly billing cycle.

If you are burdened with outstanding debt, this will naturally have a negative impact upon your credit rating. It will also prevent you from obtaining further loans. One of the best ways to deal with this scenario is to utilize the expertise of a debt consolidation specialist. As opposed to keeping track of numerous monthly bills, all debt will be lumped into a single figure. Not only is this much easier to handle, but there are many times when the aggregate amount owed can be reduced by as much a ten percent. 

Above all, make it a point to keep track of all of your finances and never spend frivolously. While your score will not rise to perfect overnight, the fact of the matter is that you will be able to make slow improvements in order to enjoy a greater sense of financial freedom in the future.