Your Credit Score Explained

By: Soni Chachad

Your Credit Score Explained

Tags: Highest Credit Score, How to improve your credit score, understand credit score, credit score rating, credit score banking, mortgage application, real estate, hot market, how is credit used to purchase a home, housing market

It is very important to understand your credit score.  Hopefully, you will find this article helpful in learning about your “Credit Score”

The Highest Credit Scores Explained
As a Broker lots of people have asked me what credit score is good, what’s the highest credit score, and how can I improve mine in order to purchase a home.  Whether you have aspirations to purchase a house, rent an apartment, or buy a car, improving your financial standing is a worthy endeavor.
Having a good credit score is really important when you are applying for a mortgage or renting an apartment.  Any credit score that is over 740 is very good and will give you access to the best interest rates on many financial products.   A low credit score might not prevent you from being approved for credit, but you will probably pay a higher interest rate or have to put more money down on the purchase of a home.
Benefits of A Good Credit Score for A Home Mortgage.
Having an Excellent or Good Credit Score will get you the lowest rate on a home mortgage.  The higher your credit score the better loan terms you receive from a lender.  Over the life of a mortgage, the additional interest you will pay with a higher interest rate will be substantial. Having the highest credit score possible and maintaining it is a worthwhile effort.
Understanding the Max Credit Score
While 850 is the max credit score available, most people will not likely have a perfect score like that. Fortunately, you don’t need the highest credit score possible to benefit from the very best interest rates and deals on loans.  Like anything, it is important to do your own research and see what best suits your lifestyle.
Credit Score Chart

Why is Maintaining a Good Credit Score Important?
Once you have done the work to improve your score, you want to keep it that way. The way to do this is to continue to do the things mentioned on the main blog page above to improve your score.

If you suddenly start missing payments, your score will be affected.  Paying bills on time contributes to more than a third of your scoring, so you will take a big hit if you miss a payment. To avoid this, it is a good idea to set up automatic payments on your account. This will prevent forgetfulness causing a lot of damage to your credit score.
Things that do not Influence Credit Scores
Your race, color, religion, national origin, sex, or marital status.
Where you live.
Your salary.
Your occupation.
Who employs you and how long you have worked for a company.
How old you are.