You Are Your Credit Score

Your credit score is you!

It is used for shelter acquisition, transportation buying, employment, etc.

Very little accomplishments in life mean nothing but your credit score is there for you to live or die.

For those that do not pay attention to such menial things….

Companies use a mathematical formula – called a scoring model – to create your credit score from the information in your credit report.

Some factors that make up a typical credit score include:

  • Your bill-paying history
  • Your current unpaid debt
  • The number and type of loan accounts you have
  • How long you have had your loan accounts open
  • How much of your available credit you are using
  • New applications for credit
  • Whether you have had a debt sent to collection, a foreclosure, or a bankruptcy, and how long ago

Companies use credit scores to make decisions such as whether to offer you a mortgage, credit card, auto loan, or other credit product. They are also used to determine the interest rate you receive on a loan or credit card, and the credit limit.

Keep in mind there is no “one” credit score. It is important to know that you do not have just “one” credit score and there are many credit scores available to you as well as to lenders. Any credit score depends on the data used to calculate it, and may differ depending on the scoring model, the source of your credit history, the type of loan product, and even the day when it was calculated.

Usually a higher score makes it easier to qualify for a loan and may result in a better interest rate. Most credit scores range from 300-850.

In other words accomplishments in life mean nothing….it is all about the math.

Did you know that if you join one of the many credit score people you can add points to your score?

It has nothing to do with your ability to pay or not….just that you have spent money to access your “score” at any time.

Now that I have set the stage I would like to tell my better half’s story.

She owed a house for about twelve years and recently sold it….she got enough to pay off her mortgage and a SBA loan that she took out to do repairs that her house had been given by Hurricane Katrina in 2005.

She had a great credit score…..she had credit cards and such…but after she sold her home and got her new score she learned that it had decreased by about 100 points.

The moral of this story is that you are supposed to be in debt to retain your “good” credit score.

Learn Stuff!

I Read, I Write, You Know

“lego ergo scribo”

10 thoughts on “You Are Your Credit Score

  1. For many years I had a 5-Star credit score. A lady at my bank once told me it was one of the best she had ever seen. Since retiring, and spending a lot less money, I have no idea what it is now. 🙂
    Best wishes, Pete.

  2. This is another reason that we need some basic minimal level of food, water, shelter and health care for every person, with no way to revoke it: see my Baby Acres plan, if you are interested?

    Oh, and a Citizen’s Income, as Dr. King called for, would also help, obviously, but I think that a little bit of land to go with it, as a basic backup, with a Tiny House on it, would at least prevent homelessness and starvation.

    And it would not be that difficult to accomplish, if we all actually wanted it to happen.

    Stay safe, gentlemen,
    -Shira

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