How an Unreliable Credit History Could Cost You

One way to limit your borrowing options is to have a low credit score. Credit scores are used by financial lenders to determine if you are suitable for their loan or credit card products. A low credit score is given to borrowers who have a poor or an unreliable credit history. If you have been denied credit recently or you are deciding to borrow in the near future then, it would be wise for you to check your credit score first. There is a charge to check your score but there are websites that provide a free credit check online service.

Although the service is free there is a catch. First you need to sign up for a free trial membership. These free trials only last for about 7 days and if you do not cancel the free membership you will be charged a monthly fee. This can cost up to as much as $50. However, if you cancel the free trial before the deadline you are still able to check your credit score at no cost.When you have checked your score you need to know if you need to increase it or just maintain it.

Credits scores are measured on a ranking scale based on the FICO scoring system. This has a scoring number range from 300 to 850. Lenders currently consider scores that are 740 and above as excellent credit scores. This means that you have a score in this range and you can qualify for the best deals on the lowest interest rates. With this score you will not have to pay down large deposits or incur many lending restrictions.

If you find that you score is around 650 this means that you can still borrow however, your cost of borrowing will go up. Fortunately you can control whether your score goes up or down. To increase your score start paying off any debts you owe. If you use credit cards pay the outstanding balances off each month and never exceed more than 30% of your credit limit.


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