Using Your Credit Score To Manage Your Money. The Credit Score Can Become A Friend. (Reducing Your Credit Card Debt and Improving Your Credit Card Score in 30 Days Book 2)

It’s hard to underestimate just how important your credit score is to life in the modern world. Unless you’re planning to retreat to the hills and become a hermit, you’ve got to learn to live a lifestyle that keeps that score healthy. There are a lot of myths about credits scores, so right off the bat let’s look at a few of them just so we’re all on the same page with regard to the almighty credit score.
What Is a Credit Score?
A credit score is a number attached to any consumer’s financial history. These three-digit credit scores are created by three different major credit bureaus: Experian, Equifax and Trans-Union using a mathematical algorithm that evaluates your credit history to produce the number. For more than twenty years the numbers of all three were based on the FICO credit score generated by a company called FICO. Only Equifax and Trans-Union still release your FICO score. Experian still issues a credit score based on another credit model, but it ended its relationship with FICO in 2009. FICO claims on its website that 90% of lenders consider a FICO score in determining your credit worthiness.
The score is a risk management tool designed to predict how likely you are to be seriously delinquent on your loan and credit card payment in the next two years. Scores range from 300 to 850 with the higher number indicating the lower risk to the lender.
What is a Good Credit Score
What is considered a good credit score changes over time? A few years back, 720 was considered a good score, but with the volatility of the economy and massive layoffs and high unemployment, 760 has become the bottom of the “excellent” credit rating range. Very good scores range from 725 to 759. Credit card companies don’t usually issue premium credit cards to consumers with scores lower than 720. Anyone below 620 is going to have a hard time getting any credit card at all and will probably have to turn to secured credit cards for a time in order rebuild their credit.
Your credit score summarizes your financial history and reduces it to a single number. It includes everything you’ve borrowed, the state of your mortgage, bank loans, finance company accounts, debt negotiations, payment histories and bad debts you’ve made. A credit score is not exactly a credit rating. Your credit score ranks you. A credit rating summarizes your financial history in more detail. Lenders make decisions based on both. You may be able to get a house loan with a subprime mortgage lender with a score of 650, but not a car loan. Generally you need a 700 or better to get good interest rates.