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Why your credit score matters

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When you apply for credit, insurance, phone service, or even to rent a place to live, providers want to know if you’re a good risk. They use credit scores to help them decide.

A credit score is a number. A high credit score means you have good credit. A low credit score means you have bad credit. A higher score means you’re less of a risk, and are more likely get the product or service — or pay less for it.

Here’s how it works: Lenders pull information from your credit report, like your bill-paying history, how long you’ve had your accounts, outstanding debt, and collection actions. A scoring system awards points for each factor that helps predict who is most likely to repay a debt. The total number of points — a credit score — helps predict the likelihood that you’ll repay a loan and make payments on time.

Credit scores can be used in a variety of ways. Here are some examples.

Insurance companies may use information from your credit report, along with other factors, to help predict your likelihood of filing an insurance claim and the amount you might claim. They consider this information when deciding whether to give you insurance and how much to charge.

Utility companies use credit scores to decide if a new customer has to make a deposit for service. Cellphone providers and landlords also use scores when considering a new customer or tenant.

Different companies have different scoring systems, and the scores may be based on more than the information in your credit report. When you apply for a mortgage, for example, the system may consider the amount of your down payment, your total debt, and your income.

To improve your credit score, focus on paying your bills on time, paying down outstanding balances, and staying away from new debt.

Learn more at Credit and Loans.

Blog Topics: 
Money & Credit


Thank you

Good deal now take a look at Dish Network and see if they play by the rules , I can tell you now they do NOT

if one's credit score matters so much why can't we get it - we can get reports but not the score!

If you would have stated this a few years ago like back in 2011, I would actually believed this article to be true. The only thing is true is, the higher the number the better your chance are that a company will give you. According to y experience with paying your bills on time, yes that's good and your credit does billed depending on what type of credit. Not all credit builds your score. For example: We constantly hear that cars build your credit. I brought a brand new car off the showroom floor. I paid on time as agreed, and my credit only climbed about 30 points in the seven years. At the end of the loan the auto finance company reported to the credit bureaus that I was 30 days past due. I contacted the finance company and the credit bureau via phone and certified mail. My score dropped over a 100 points when this incident first happen. Long story short, the finance company don't think they should be held accountable because it was their mistake that kick off these chain of events. The credit bureaus are acting like they can't make the corrections. All I know come September 22 2016 if this is not corrected, I will pursue it in court. I've been dealing with this situation since March 2016, and it's getting old.

They did the same to me Frank....go for it. Its almost like they want everyone to actually have bad credit...!!! Been trying to buy a house for months now, no one will give me a loaan due to my daughters car payment being late....not my car, but hers....augh !!! Now Im stuck with high rent, when I really could buy at a lower rate.....

It's all a game. It's a way of getting you to buy in to a product they're selling.

I have a good credit score. What I don't understand is why they want you to have more than one credit card. I pay things monthly in full. Credit Karma has a better score than my bank. It's still above the average. The only thing from me having a higher score is closed accts. and only having one credit card which I hardly use. Why should I apply for a 2nd one that I won't use at all. Confused by all of this. I don't have any loans, a mortgage and I drive a 16 year old car. I hope it doesn't pass before I do. It is a Subaru and has 73,000 miles on it. Am I crazy not to get another card. Credit score is 751 at bank.

This is what I call the richer and poorer Baits of capitalism. They want you to get another card (the bait) so you can spend more. Therfore push your limits of your stable financial resposibility. All to get a Better number. REALLY. This country suckers it's citizens to spend, and hopefully fail at repaying back your bills. That's what a 2nd credit card will do.

I wouldn't apply for another credit card, use the one you have and to do that put your monthly bills on that one credit card and pay them each month instead of the company you normally would pay for that bill.

I have about 3 credit cards: One for doing riskier purchases ($0.00 fraud protection) with a low spending limit, an East coast bank, and a West coast bank. If I get one of my credit cards tangled up with a scammer or fraudulent charges, and the problem gets out of control, I can easily cancel one card without hurting my normal spending pattern nor credit score. I also pay 100% of my credit cards bills off every month. Icing on the cake for two of my cards; they provide me with frequent updates of my credit score FREE, just for having their card. Neither card has an annual fee.

FrankNittyII I hope you get it all resolved. Good luck in court. They are sticklers when coming to them being right. Fight them they think you won't do anything. That is not right what they've done to you. Best wishes to you on this fight.

This credit score thing is just another way of jacking up prices on durable goods that everyone requires to live.....Why not give me a home at a reasonable rate I can afford to pay...??? That way the lender makes more money and I have a secure reasonable home loan for years to come ..??? Just backwards thinking to me...

I agree with all comments posted...

How can I owe for purchases made in a state I never visited. Is the credit company regulated to confirm the companies that claim you owe them money. Are we able to get a copy of the receipt with a signature? Why is the amount owed after the last payment different from the Collection Agencies?

This FTC article tells how to dispute an error on your credit card statement.


Iv'e been trying to consolidate my CC's to one payment, I became disabled and had to depend on CC for food and housing, my CK score is in the excellent zone. I pay way more than min trying to reduce amt. Can't get it from anyone, never had bad credit in my life. Have never been late in the 45 years Iv'e had credit and have $125,000 in home equity. My wife's income was what was reported only due to the disability, Also have a stock portfolio worth 1000's and a coin collection since I was a paper boy, who knows how many $1000's are in that. Hoping to leave to kids. I believe they are not lending $$ due to interest rates being low. They are greedy, bottom line!

I have always thought the FCRA was a tool that could be used by the government to police these deceptive lending practices by corporations. I don't see that happening.

You said that the credit corp, uses our credit history ,like our bill-paying history .That's not right have you ever looked at your credit history and asked yourself where is Comcast ,Entergy ,Monthly rent bill and other bills that you pay every month [ That is call credit history reporting ] The credit Corp.don,t report none of the above [ Why ]So how can that what credit corp report is right ? And they put Wrong info and aloud others to say that you owe them.This is how they Stop Companies from starting up and even put them out of business [ they got a lot of power to help other companies .

Your credit report shows your history of making payments on credit cards and loans. Businesses may report your credit, loan and payment history to one or more credit reporting companies.

Your credit reports may include:

  • a list of businesses that have given you credit or loans
  • the total amount for each loan or credit limit for each credit card
  • how often you paid your credit or loans on time, and the amount you paid
  • any missed or late payments and bad debts

The system pushes credit cards because they are high interest rate loans, and the nature of the revolving agreement is that it is really easy to buy more than if you had to save money first.

It would be better for consumers if the banks gave more fixed loans at a higher interest rate and counted your reliability on how you paid your real bills like housing and utilities, or letters from local businesses. Higher rates for banks would allow them to pay more on savings accounts so debt would be for extraordinary purchases.

Rich vs poor. If one has money or not, that is the question.

I have good credit, you can have more than one card, for instance, online clothing retailers(or whatever your venue) that issue a master card or visa not a store card. I buy a sweater or skirt once or twice a year, don't buy into their SALES!!! unless you can get pieces for better than 75% off, anyway pay off the card at the end of every month - this keeps the cycle going. I believe their are laws against predatory lending and if you do find yourself in a problem, make sure you pursue that issue until you can't do anything else. This keeps those lenders front and center - hold them accountable - You can and will make a difference.

I have a long term issue with equifax. They have alot of errors on my credit report. Things that i never had. I have been trying to dispute this since i found out 3 years ago. Still a problem. Why do i have to pay for other peoples mistakes. These people can not read. And never name your kid the same full name as in a junior - senior. I want them to eestore my credit to what it was before they made the mistake.

How is it that credit bureau can report wrong information on somebody's report and let that person take the hit for credit debts that r not mine and they dont have to fix it and restore my credit to what it qas before all these things were roported as mine. Really? Who pays for other peoples mistakes?

This FTC article about Free Credit Reports tells what you can do if you see errors or mistakes on your credit report.

Under the Fair Credit Reporting Act, both the credit report­ing company and the information provider (the person, company, or organization that provides information about you to a consumer reporting company) are responsible for correcting inaccurate or incomplete information in your report. To take full advantage of your rights under this law, contact the credit reporting company and the information provider.

I have always checked my credit reports thru the years (I'm 60+). I have found errors on my credit report at least 25% of the time while active in my career. I have almost always found getting the errors corrected, easy. For not so nice things on your credit report that are true, don't forget about your right to add a "Consumer Statement" to the offending item, to explain the circumstances.

Some of the errors found have been some one else's drivers license, wrong versions of my name, "General Delivery" for my address (super insulting) at a time I had been at the same house for over 20+ years, account in collection, etc. Some of the things I got corrected made a significant change in my credit score. While you are at it, be sure to make correction at ALL 3 bureaus. It is well worth your time.

I just was notified that my cr score changed downward. Although still excellent, my financial picture only improved as I had recently sold and paid off a rental property mortgage. In my score "dashboard", it told me this: "Open real estate account balances are too high compared to their loan amounts. People who haven't paid down much of their mortgage or other real estate loans are higher credit risks than people who have."

"What you can do: As monthly real estate payments are made, a portion of the outstanding principal balance is reduced, benefiting your score. Whenever possible, further pay down balances on your real estate accounts. Over time this will also have a positive impact on your score."
That appears to be a ridiculous concept as it does not take into account the equity in the property, how big the down pmt was, etc, that a home loan being paid on time is fully compliant with the expectations of the mortgagor and mortgagee, and is fully demonstrative of sound credit management. Note that all the other credit metrics gauge the limit against how much is used, because the amount used is discretionary. For mortgages a mortgagee can put 50% down yet will still be at 100% of the loan value on day 1, by definition of the mortgage loan. This unfairly penalizes anyone with a home loan that is less than about half way thru its term to maturity. If we assume that the credit algorithm is biased to a paydown of a mortgage of 30% to warrant a preferred rating, on a 30 year mortgage, 5% interest, it's month 172 before that is achieved. C'mon man!

I worked hard all my life from 16 and always paid my bills on time or in full. As I advanced in my career set up auto payments so never late.Even on a HELOC I co-signed for my Mom to help her and 10yrs+ never late. Yesterday, I wanted to "splurge" on myself for once, a $1097.00 desktop game computer at Best Buy. While working I saved money as much as I could, still in bank before becoming disabled 10+ yrs ago, I wanted to do a CC at 0% interest 6 mos. Or year they were offering, set up auto payment once approved. My husband always goes above and beyond when I do this as I never buy anything for myself so he gets excited as he knows I am not one to be spontaneous. We needed a bit if normality as we've had 4+ yrs if hardships due to others greed. We both compare other places and were set on this one computer. He stayed up all night setting up any area for me as we relocated and not easy to unpack. He knew I wiuld be approved as he saw in the ppast, but to my surprise I was denied first time in 30 years. Beyond shocked, disappointed but saying nnot eant to be, he felt worse than myself (but nnot really) it crushed me when I called to confirm approval, customer service rep just said no without explanation, just said something on credit report. I of course requested free credit report, nothing warrants not approval and does make sense at all. To add injury to insult we purchased two tv's last year from Best Buy as our other ones had broken during relocating to SC. We paid by check because we saved money and my mom left me money when I lost her to cancer. My sibling stole half left to me as one of her wishes, but that's a long story. Best Buy lost a customer as I will go elsewhere, but the shock to my health as it suffers greatly when anxiety increases is not worth worrying about a credit score. I believe it much more emphasised from all these commercials about it to make consumers worry more than need be. Life is hard enough, if cash is not available, don't buy unless necessity. Interest on CC are outrageous if you don't double up on monthly payments, they make much more than should be allowed with APR of 24.99% when 1-2% given on savings accounts. Spare yourself the hassles, less stress in your life will keep you healthy. I paid for food on CC once in my life, it was difficult, but happens. Now I want nothing, have only little amount of needed items, no luxury. I am a honest person who has been failed by every system...this was the last time. The World has changed drastically and it is important to enjoy what you can, sunrises are awesome, giving us another day without debt or closer to not having it. Good luck everyone,peace and Godspeed!

We have relocated my mother back in the states because of medical reasons/safety concerns. She has left a car behind with a LONG termed lease and we are trying to decide how to manage the debt without destroying her credit. The lease is with a lender who indicates that they will not authorize the shipment of the car to the states (she will need a car and is presently paying for the one in Puerto Rico). We just want to bring it here since she still owes the bank 3 years of the lease. Our only alternative (as we see it) is to buy the car and then ship it. Any recommendations?

I have made on time payments for years now. I own a home; I’ve paid off my car But my score continues to decline. I was at 692 which was my highest ; now im down to 620.
All my purchases and past history are there and seems to be all mine. Still I can’t see how it would be so low!

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