It’s been established that your credit score is a very important component to your personal profile. To refresh your memory, your credit score influences the following (and more):
- Employment
- Insurance
- Interest Rates on Debt
- Qualifying for Loans
- Renting an Apartment
- Opening a Checking/Savings Account
It’s extremely important to understand what the breakdown of that three digit score between 300-850 is. Here is the breakdown as it currently sits (Image courtesy of myfico.com):
Your credit score is used to predict the likelihood of a person missing a payment in the next three months. As you may assume, the best way to predict that type of behavior is to take a look at the recent history. This is why the largest percentage (35%) of your credit score is based on strictly payment history!
Are you currently late on any bills? Get current! Statistics (and common sense) say if you’re late now, you’ll be late next month. If you get things back on track, it will just be a hiccup that you overcame in the past.
If you have specific questions related to credit, please e-mail me and I’ll address them! We’ll try to cover more credit related topics in the future. There’s simply too much to write in one post.
