you're not living the lifestyle you want, and you can't figure out how to turn things around. the key is credit. it affects mortgage loans, credit card interest rates, cell phone bills, etc. if you can raise your credit score, you can start living that vip lifestyle.
take a look at the difference in vehicle selection between someone with a low, 475 credit score, and someone with a high 720 score.
credit scores affect whether you can get credit and what you pay for credit cards, auto loans, mortgages and other kinds of credit. for most kinds of credit scores, higher scores mean you are more likely to be approved and pay a lower interest rate on new credit.
want to rent an apartment? without good scores, your apartment application may be turned down by the landlord. your scores also may determine how big a deposit you will have to pay for telephone, electricity or natural gas service.
lenders look at your scores all the time. they look at your scores when deciding, for example, whether to change your interest rate or credit limit on a credit card, or whether to send you an offer through the mail. having good credit scores makes your financial dealings a lot easier and can save you money in lower interest rates.
credit scores give lenders a fast, objective measurement of your credit risk. before the use of scoring, the credit granting process could be slow, inconsistent and unfairly biased.
FICO scores provide the most accurate picture of credit risk possibly using credit report data.
credit scores - especially FICO scores, the most widely used credit bureau scores - have made big improvements in the credit process:
people can get loans faster. scores can be delivered almost instantaneously, helping lenders speed up loan approvals. today many credit decisions can be made within minutes. even a mortgage application can be approved in hours instead of weeks for borrowers who score above a lender's "score cutoff". scoring also allows retail stores, internet sites and other lenders to make "instant credit" decisions.
credit decisions are fairer. using credit scoring, lenders can focus only on the facts related to credit risk, rather than their personal feelings.
credit "mistakes" count for less. if you have had poor credit performance in the past, credit scoring doesn't let that haunt you forever. past credit problems fade as time passes and as recent good payment patterns show up on your credit report. unlike so-called "knock out rules" that turn down borrowers based solely on a past problem in their file.
more credit is available. lenders who use credit scoring can approve more loans, because credit scoring gives them more precise information on which to base credit decisions. it allows lenders to identify individuals who are likely to perform well in the future, even though their credit report shows past problems. even people whose scores are lower than a lender's cutoff for "automatic approval" benefit from scoring.
credit rates are lower overall. with more credit available, the cost of credit for borrowers decreases. automated credit processes, including credit scoring, make the credit granting process more efficient and less costly for lenders, who in turn have passed savings on to their customers. and by controlling credit losses using scoring, lenders can make rates lower overall. knowing and improving your score can also lead to more favorable interest rates.