What is a Credit Score?

Most of us know that we have something called a credit report on file somewhere. We also know that credit report affects our ability to obtain financing, and it also affects the interest rate we pay if we can get credit. This impacts our home mortgage, car loans, and other credit. However, even though we have some vague idea that we have a credit score and credit report, we really do not not understand it.

Bad Credit Blues explains credit scores here! They tell us that Americans have a number assigned to them that is between 300 and 850, and the higher that number is the better! The majority of people have credit somewhere between the high 600′s and mid 700′s. A credit score below 600 is weak, while a credit score over 700 is usually pretty good. And even though all 3 major credit bureaus use the same basic calculation for credit scores, the scores are likely to differ slightly, mostly because different information may get reported to each source.

Remember, the better your credit score is, the less you will pay for credit. A large factor in calculating your own score is how timely you pay your bills, and the amount of unsecured credit you have used vs. how much you are allowed. So try to make those payments on time, and keep control of your credit use!

Of course, here at the Frugal Pig, we advocate using as little credit as possible. But sometimes using credit is a wise decision. If your kid needs dental work, your car is broken down, or you need to stock up on PB&J, and credit is what you have, then credit is what you need to use. Just try to be responsible and keep it in control.

If you enjoyed this post, make sure you subscribe to my RSS feed!

• Debt Settlement Keeps you Away From Bankruptcy
• Author’s Bio: This is a guest post from Robin Williams who writes on Debt settlement, Debt negotiation, Bill consolidation and...

Related posts brought to you by Yet Another Related Posts Plugin.