The Astounding Importance Of Good Credit

  • Buyers
  • 4:51 pm
  • No Responses
  • Print This Post

There was a time – not all that long ago – when a personal relationship and a handshake would pretty much guarantee gaining ‘credit’. From about 1960 on, though, the need to gather, appraise and quantify information about personal credit use (and misuse) grew like topsy — and the one tool making this analysis possible…was the Computer.

Today, one’s ‘price of admission’ to many purchases is based entirely on one’s ‘credit score’. The larger the purchase – such as a home – the closer the scrutiny, the higher the standard. We’re not sure this is ‘progress’, but we are sure it is Reality…and a system you must understand and protect. An estimated 75% of all lenders use your credit score to evaluate your loan applications. A numerical calculation, it is a summary of your entire credit history. Comprised of a number between 300 & 850, the higher that number, the greater your chance of being approved.

But how is this number determined? About 35% is based on your credit history, examples being how many times you missed a payment, or were late. Another about-30% relates to how much you currently owe, as against the amount of credit you have available. Another 15% reflects how long you have had credit with existing accounts, the longer being the better, while about 10% of your score is based on how recently you’ve opened new lines of credit. Today your ‘credit standing’ is more important than ever, as it often spells the difference between success and failure for your goals. Be careful how you use it and, above all, don’t abuse it.

You will almost certainly need it more than you know.

Leave a Reply

Your email address will not be published. Required fields are marked *