BDN Home
- September 6, 2008
Know Your Credit Score
Your credit score can have a major impact on your ability to secure a loan if you’re a woman in business. Banks and just about every other major credit card company uses that score to determine your creditworthiness, as well as your ability to pay back any loans you might receive.
Anyone who has checked into their credit score has probably found the rating scale to be somewhat confusing. There are a bunch of numbers, each meaning something different. Understanding how this rating works will help you to read your credit score effectively.
There are several pieces of information reviewed by companies when they build your credit score. These factors include the following:
- Your past payment history
- When you pay your bills
- The amount of outstanding debt you have
- The length of your credit history
If you have a great deal of debt or you don’t have a very long credit history, you will receive a lower credit score even if there are no “black marks” against you.
Recent credit applications also factor into your score. If you have made too many applications recently, this will cause you to receive a lower score. As will too much debt at high interest rates, such as high rate credit cards.
A score of 700 or higher is considered a good credit score. At this level, you shouldn’t have any problems getting credit, and at a low rate of interest.
If your score is between 450 and 650, it indicates that your credit needs some work to improve it. At this level you’ll likely have a harder time finding a loan or qualifying for a credit card without some type of security. You will also likely be paying a higher interest rate because you are considered a higher risk.
If your score is below 450, your credit is in need of some serious help. At this level you likely won’t be able to qualify for a loan or credit card until you pursue some form of credit counseling to improve your score.
If your credit score needs improvement, there are a number of sources that can help. There are many credit counseling services available, many of which are free to use. They will be able to assess your financial situation and offer advice as to the best route to improving it – and your credit score along with it.
2 Responses to “Know Your Credit Score”
Beverly, this is such a great article and has such an important message. I have a credit reporting service that I use that every two weeks tells me who, what, when affects my credit. It’s so essential to keep up to date on your credit rating. It not only affects your getting a loan, but also getting a job. They pull your credit rating as well. Even when you go to rent an apartment, they’ll pull your credit history. I’m very protective of mine. Anytime someone pulls your credit history, a few points drop. You have to be so careful.
Thanks for such an informative article!!!
By Vicki M. Taylor on Sep 7, 2008
According to Equifax, hits, (checks), on your credit report do not affect your credit score unless you are actually applying for credit. This is posted online:
“Equifax, A common misperception is that every single inquiry will drop your score a certain number of points. This is not true. The impact of inquiries on your score will vary – depending on your overall credit profile. Inquiries will usually have a larger impact on the score for consumers with limited credit history and on consumers with previous late payments. See, “Equifax’s credit score”
By Bill on Sep 22, 2008