I wish to tell you about two factors that affect your credit score.
1. How long have you been using the credit?
It may seem strange, but in this part of the evaluation the best results are obtained by those who use the credit for many years. Studying the client’s credit report during a long period of time, the agency may forecast further developments with a high degree of reliability. A client who observes terms of the loan contract for a short time, maybe, has not yet faced with complicated life circumstances, the agencies suppose. The highest scores are obtained by those clients who do not miss any payment on the credit – even in case of job loss or prolonged disease.
A plenty of people go shopping and spend a lot and take a pride in, but when they come to the bank for big loans – the refusal is often surprising for them. Meanwhile, it is not surprising – if a person has never borrowed, how the bank may know whether he is a good loan subscriber or a bad one. If you did not take loan, then the scoring agency cannot set your score – and it’s like a zero score.
So if you’re planning to take a big loan for a flat or house in a few years, it makes sense to line up the credit report in advance. Even if you are able to buy a car for cash – it may make sense to take it on credit. A prompt repayment of a relatively small loan will establish a certain level of confidence between you and the bank, and through the scoring agency – between you and the whole credit system. Create your credit report.
2. When did you apply for a credit for the last time? The average American consumer takes the credit once in 22 months. If the client asked for the loan in a few banks several times in the last month, most likely, he really needs funds – and this fact lowers automatically the credit score. The more acute your need for money is – the lesser the wish of the bank to borrow you is.
Each appeal of the bank in the scoring agency about a concrete debtor reduces his score on some items. You are able to request your own score from the credit bureau without negative consequences.
Those who managed to get a loan for any purpose certainly have to order credit reports regularly. These reports can show you a real picture of your credit but in many cases the reports are very complicated to understand. Here you can make use of credit report monitoring service – they will make the reports easy to understand.