We have all heard how important your credit score can be, but many people do not understand why it holds so much power. A credit score is a number between 300 and 850 that indicates your creditworthiness. Lenders use this number to determine whether you qualify for a loan and how low or high your interest rate on the loan will be. Your credit score is published by FICO (the Fair Isaac Corporation), which is why they are also referred to as your FICO score. The closer your score is to 850, the more likely you are to obtain low interest rates on your loans.
Understanding how your credit score is determined can be confusing. There are many factors that contribute to your credit score. While many people believe that reducing your creditworthiness to a number is wrong, that is just how it is done. Thus, you should work to keep your credit score as high and strong as possible.
If you have taken out student loans, your timely monthly payment to your lender can work to build your credit. This can be extremely helpful since many recent graduates do not have an extensive credit history. Showing you are responsible with your student loan will bolster your credit score and allow you to obtain other loans with lower interest rates. This can save you thousands of dollars – especially on a mortgage loan!
Lastly, it is important to remember to review your credit report at least once a year to ensure that everything on it is correct. Having an erroneous notation on your report could negatively impact your credit score. To learn more about errors on credit reports (and how we can help), please read our blog titled “Are Errors On Your Credit Report Holding You Back?”
For your student loan, bankruptcy, foreclosure, and debtor’s rights matters, contact DeLadurantey Law Office, LLC at (414) 377-0518. We serve the counties of Milwaukee, Waukesha, Kenosha, and Racine, including such areas as Milwaukee, Merton, Delafield City, Waukesha City, and Kenosha. Visit our web site and like us on Facebook.