Credit Score Basics

Credit scores are calculated using all of the available information about a person’s credit history. They take into account the person’s level of debt, level of available credit, employment status, homeowner status, and more. Many members of the finance industry use these to determine the efficacy of extending additional credit by way of loans and credit cards to an individual.
Typically, most people have a credit score that falls somewhere between 350 and 800. The higher the credit score happens to be, the better it is. It is difficult to get a high score over 700 unless you pay your bills on time all of the time, pay your loans off completely, and avoid defaulting ever.
Almost anything a person does that relates to credit cards and debt can affect a person’s credit score. If he acquires too many cards all at once, his credit score can drop. If he uses all of his credit cards to their full limit, his credit score can fall lower. If he cancels too many cards all at once, it could negatively affect his credit score and cause it to fall.
If a person has trouble keeping a job, this can negatively impact not only their credit score, but it can prevent them from acquiring a mortgage or car loan. If a person can’t keep a job, then he won’t be able to pay their bills. If he can’t pay his bills, his credit score drops even further.
It becomes a vicious cycle that becomes difficult to get out of. Once a bill is left unpaid, a loan goes into default, or employment becomes intermittent, these things remain on a credit report for quite a while. Some things can remain on a credit report for as long as seven years. It takes a long time to repair any damage to your credit score, so a person should be careful how he handles his debt obligations.
Credit bureaus keep track of a person’s credit score. The numbers vary because they use different formulas to find them. Although the credit scores vary slightly from one credit bureau to another, the numbers will not be that different. It is important to get a copy of your credit report several times a year to check on your credit score and how it was calculated.
If any false information is on your credit report, you can request that it be investigated and removed when it can’t be verified. Unfortunately, negative information such as several late payments, unpaid loans, and similar things can’t be removed from your credit report as long as they are true. A person should take the time to monitor his credit and maintain good credit behavior to achieve a good credit score.