Understanding what your credit score means

If you have ever applied for a loan, you know the importance of having a good credit score. But what makes for a solid score? At Ledford, Wu & Borges, LLC, we know that understanding and building your number is an important part of preserving your financial future.

Your credit score is what creditors will use when determining whether or not you are a good candidate for what they offer. A number of factors contribute to your score, including the following: 

  •        The type of credit you have and how long you have had it
  •        Your history of paying bills in full and on time
  •        Any outstanding debts you have
  •        Any collection actions that have been taken against you

According to NerdWallet, people who have a credit score of 690 or higher have a good to excellent rating. If your score falls between 630 and 689, you have fair credit. Whether you have fair credit or a score lower than that, you should focus on building. Keeping your balance on credit cards far below the limit, paying off debts and paying bills on time are all ways to boost your score.

The Federal Trade Commission points out that you can receive a free credit report once a year through contacting the Annual Credit Report Request Service. You can also regularly monitor your report through paying a fee to one or more of the three national credit reporting companies. Experts recommend checking your report at least once a year to make sure the information is current and accurate.

For more information on this topic, please visit our page on monitoring your credit score.

 

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