There are many consumers whose credit scores are not good, which is surprising because their score plays such a important role in their personal life, at least as it relates to their monetary matters. Basically it determines their financial trustworthiness as a person, and whether or not they can qualify for the loans they desire at favorable borrowing and repayment terms.
That's why the credit score is usually one of the first things every financial institution checks when people apply for credit or loans. They do this to analyze the credit risk and judge the character of the person who is looking for the loan or credit card. In fact it is probably the most important criteria to the lender that the consumer should have strong credit scores. Major lending agencies especially are very particular about this measure of creditworthiness.
That's why the credit score is usually one of the first things every financial institution checks when people apply for credit or loans. They do this to analyze the credit risk and judge the character of the person who is looking for the loan or credit card. In fact it is probably the most important criteria to the lender that the consumer should have strong credit scores. Major lending agencies especially are very particular about this measure of creditworthiness.
So for those out there shopping and purchasing and using their credit cards, it is essential that you remember that the money you spend is not yours. Because it is borrowed it needs to be paid back in a timely fashion according to the terms and conditions of the credit agreement that you agreed to. If not paid according to the lending terms, your credit score will be affected, and your future loans and credit relationships will be impacted in a negative way.
Unfortunately there are also many people who are prone to accumulating too much debt which in itself can also damage your credit score even when the debt is being paid according to the specified repayment terms. So even if you pay your minimum payment each month, by carrying higher balances on your credit, you may increase your perceived credit risk, and that may lower your 3 credit scores.
However, humans are prone to making mistakes, and there is no shortage of people who have a bad credit score. If you are one of them, keep in mind there is virtually no mistake in the world that cannot be corrected. This certainly applies to damaged credit scores. All one has to do is to control their expenditures, limit and reduce their loan balances, and make their payments on time. With time your credit score from the 3 major credit reporting agencies will improve.
Unfortunately there are also many people who are prone to accumulating too much debt which in itself can also damage your credit score even when the debt is being paid according to the specified repayment terms. So even if you pay your minimum payment each month, by carrying higher balances on your credit, you may increase your perceived credit risk, and that may lower your 3 credit scores.
However, humans are prone to making mistakes, and there is no shortage of people who have a bad credit score. If you are one of them, keep in mind there is virtually no mistake in the world that cannot be corrected. This certainly applies to damaged credit scores. All one has to do is to control their expenditures, limit and reduce their loan balances, and make their payments on time. With time your credit score from the 3 major credit reporting agencies will improve.