Understanding Credit Scores PDF
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This document is a guide to understanding credit scores. It explains how credit scores work, the benefits of good credit, and how to improve your credit score.
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1. Credit Score General Range: 300-850 Above 700: Considered low risk to lenders; Shows a good financial history and habits. Below 600: Considered high risk to lenders; Difficult to get credit and/or expenses to borrow. 2. The benefits of good credit: o o o o Lowers your interest rates. Speeds up c...
1. Credit Score General Range: 300-850 Above 700: Considered low risk to lenders; Shows a good financial history and habits. Below 600: Considered high risk to lenders; Difficult to get credit and/or expenses to borrow. 2. The benefits of good credit: o o o o Lowers your interest rates. Speeds up credit approvals. Reduces deposits required by utilities. Get approved for insurance. o o o o Get approved for apartments. Obtain better credit cards, car loans, and mortgage offers. Able to borrow higher amounts. Be approved by an employer. 3. How to boost your score: o o o o Pay your bills on time. Keep balances low on credit cards. High debt levels can hurt your score. Apply for and open new credit accounts only when you need them. If you have missed payments, get current and stay current. The longer you pay your bills on time, the better your score. Specific Actions to Raise a Credit Score: Action, Score Change: a) b) c) d) e) f) Pay off accounts, +80 Build history of paying on time, +40 Pay down credit balance, +40 Pay down further and no new accounts opened, +50 Pay all overdue payments and keep loan current, +20 Six months of on-time payments, +30 Source: http://www.myfico.com Answer each question with a complete sentence on a separate piece of paper. 1. If your credit score is below 600, what type of credit risk are you considered by lenders? 2. What are three ways you can boost your credit score? 3. What are four benefits of having good credit? 4. If your credit score is above 700, what type of credit risk are you considered? 5. To raise your credit score by 50 points what action could you take? 6. To raise your credit score by 80 points what action could you take? 7. What actions would you need to take to raise your credit score by 260 points? .
