Why You Need to Have a Good Credit Score

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What is a credit score ? A credit score is a number that lenders use to help them predict how a loan will be repaid. Credit scores are also called risk scores because they help lenders predict the risk of making a loan. Credit scores range from 365 to 840, with the higher scores being more favorable.

How to Determine if You Have a Good Credit Score

Whenever you think of and finance or borrowing you need to present all your till date financial details. These details are analyzed to determine whether you have a standing in the market and are worth even giving a finance. They check you for value; that is if you are granted a loan what are the chances that you will repay the loan The analysts prepare a report and judges you buy this report and your credit scores mainly. This term is crucial when you of credit, credit repair or sources, this term is checked and analyzed for making a summary for your financial stability. Here is some factors to help you understand what a good credit score is.

Factor will help you know how your total score is made up:

what a good credit score is Payment history determines the 35% of your total score. Regular payment of bills,including minor ones like parking fines, library fines, etc. all this has to be cleared and paid on time.

The next 30% of this score depends on your debt. Whatever you owe and how much is available balance in comparison to your loan was taken, etc.

The next 15% is based on you account history, how many accounts you have had and how many are active, your transactions in this account, etc. Have few accounts that have been active since long, to get a better score

Next 10 % depends upon your recently opened accounts, your current interaction with the lenders, etc. If you have been looking around for finance and seeking help from many lenders, it will hamper your score.

Last 10% depends on the type of your borrowings. If you have mortgage loans, then it shows that you can repay a fixed amount every month. But if you have something like a credit card, it means that there is no fixed surety of payment. This gain hampers the score.

Understand these factors so that you can maintain a good credit score and also understand your credit repair methods. This will help you have a good score always and never face any difficulty in getting credit.

How To Get A Better Credit Score


It’s important to understand how exactly your credit score is calculated to get a better one.

Available Credit To Debt

This is where all the debt you have is going to be looked at. It will include any: credit cards, car loans, student loans, personal loans.It also is going to look at your available credit; this is money that you have available to borrow but is not using. For example, available money to spend on your credit card would be available credit.

This factor weighs roughly 30% in your total score calculation. To improve this, you should strive to show more available credit. Many individuals have large sums of debt, and this won’t be looked at quite as much of your available credit. By showing the money that you have available to borrow, you are showing that you are in a secure financial position. If not, your credit cards would all be maxed out.

Payment History

This is the most important factor in your FICO rating and is roughly 40% of your overall score. This is where all the negative items on your credit report are counted and all the positive items. It is important to build positive marks if you’re working to fix your credit score however if you continue to have negative items it will be very difficult to obtain a good score.

The negative items are what is damaging your score and must be removed. You can remove these by filing a dispute with the credit bureaus; you may also be able to settle with a debt collector and in exchange have them stop reporting the item to the bureaus.

Credit Inquiries

This is the number of times your credit gets checked. If you have an exorbitant number of credit inquiries, then it is going to appear that you’re trying to finance a lot of purchases. Try to limit the frequency in which your credit gets checked; the bureaus do realize that it will sometimes be checked just in the course of everyday life. This is going to be roughly 10% of your FICO score.

Length Of Accounts

This is going to examine how long you’ve been using credit and how old each account is. It also is about 10% of your score, and you should try to keep long open good relationships with your lenders.

Types Of Accounts

The idea behind this is the more diverse accounts you have or different accounts, the better risk for a lender you will be. This is only 10% of years overall score, and we wouldn’t suggest you to worry much about improving this area.

Instead, focus your efforts on your payment history and available credit to debt ratio. These two pieces of information are almost 70% of your entire score, and if you can show responsibility in these areas, then you’re almost guaranteed a good credit score.

You don’t just have to live with bad credit; your federal government has to give you the right to remove negative marks from your credit report. Removing bad credit items from your history has been shown to be the most efficient method of getting better credit.

The Benefits of a Good Credit Score

Lower Interest Rates

free-credit-scoreWhen you first provide your information for your credit card application, your respective bank will offer you an interest rate that is based on previous credit scores. Interest rates are one of the factors that influence your monthly repayments, and a bad credit score can result in hefty rates which contribute to an even larger monthly repayment. However, a good credit score can encourage your bank to offer you lower interest rates on your monthly repayments. Not only will this eliminate the added pressure of an extra fee, but it will also assist you in ensuring the timely repayment of any debt.

Higher Chance of Loan Approval

There comes a time when everyone aspires to own their home, send their children to university or pay for a once-in-a-lifetime holiday. Few people can afford to turn these dreams into reality without financial assistance. However, for the rest of us, with the help of a personal or home loan, these goals and aspirations are quite plausible. A good credit score will yield a higher chance of loan approval while a negative score leads the bank to believe that you’re not reliable. Keep your future in mind and opt to pay off your credit card debt.

Approval on Higher Credit Limits

Did you know that your borrowing capacity is based on your income as well as on your ability to repay the debt that is owed to your financial service provider? If you can repay your credit card debt promptly, it is possible that your bank will increase your credit limit. It is important to treat this increase as an appointed fund for emergencies or ‘rainy days’. Otherwise, you might just get yourself into a trap and erase your existing credit score.

What to Think About When Planning to Venture into a New Business

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It is said that the world’s economy is controlled by business men and women. It is due to this reason that almost everyone yearns to be a business person at one point in life. They strongly admit that, that is where money is. Yeah, given the number of world billionaires and millionaires who are into business, this is a fact that cannot be challenged.

How You should Go About It

One thing that most people don’t fathom is that, not all those who venture into business become successful. This is mostly because most people venture into the wrong business or messed up when they were planning for a new business. Doing business is difficult and if it were otherwise, everyone would be a billionaire by now. If you are planning for a new business there are several factors that you need to put into your head. Planning is the main tool for any business person, may he/she be a newbie or a knowbie.

You need to decide what type of business you want to venture into, is it production industry or service provision business? Once you have made this decision, you then have to narrow down to the specifics in you chosen field. What product do you want to be associated with or what service can you provide? Always remember that your choices should be guided by passion and the current business situation. Your passion should be your driving force because it is only doing what you love or you are passionate about that you will be able to overcome the challenges of doing business which are bound to be there. Considering the current business situation should not be excepted when planning for a new business.

Seeing What’s Available In the Market First

new products coming outYou must know what gap exactly exists in the market and how different your chosen business will be from what is already there. You must consider the completion that already exists and above all the legalities that are needed before starting your business. Planning for a new business cannot be complete without considering the micro economic factors that may affect your business. These may include things like availability of capital, man power, your business objectives, vision and the time needed to realize those objectives. Any person planning for a new business needs to be able to predict the business’ stream of cash flows and decide whether they are favorable or not. Planning for a new business is the ultimate reason why most businesses succeed.

Effective Ways to Smartly Manage Your Money

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Money is one of the most important ingredients of a successful life. If you truly want to be successful you have to learn the art of money management, but it is easier said than done.

Get Organized and Start Budgeting


This is the most basic of skills and the one that is most important. It is very easy to get carried away with your spending. Most people do not even realize where their money is going until it’s already gone. Hence, it is important to know where and why you are spending your money.

First and foremost, setup a budget. This is not going to be easy to start with, but you will reap great benefits for a little effort. Prepare a list of all your current bills and their due dates. Have reminders for your due dates, and pay off the bills before the due dates. It doesn’t matter how small the penalty charges or late fees is, never take it for granted. Have a cut-off for your miscellaneous expenditures such as for entertainment, dining and traveling. Make it a point to not go over the cut-off. Be disciplined and strict with yourself.

Track Your Expenses and Examine Your Spending Habits

tracking-your-expensesMost people want to cut-down on their unwanted expenditures, but crib that they cannot. This is because they do not know what their unwanted expenditures are If you do not know where the leak is, then there is very little chance of plugging it So track all of your spending, no matter how small it is It is best to do it on a daily basis. Do not even let a single penny escape your tracking.

Regularly examine your spending to identify where you spend the most and decide if it is necessary. You will soon identify where you are spending erratically. Once you identify it, plug the spending. Do this on a regular basis and soon your spending will be effective and efficient. Make use of the many apps and software available to track and examine your spending.

Pay off Debts Aggressively

Be ruthless in paying off debts. Do not postpone. Make it a priority to be debt free. The sooner you are debt free, more aggressively you can pursue your other financial goals. Know exactly what your debts are and the interests you are paying. Prepare a plan. Clear off debts with higher interests, and use the savings to fuel clearing off other debts. Stick to your plan, and soon you will see why coming out of the shackles of debt was the best thing for you

Invest In The Future

You won’t be able to able work as hard in your 50s and 60s as you did in your 20s and 30s. Hence, start preparing for the future. Have ample insurance and retirement plans for any unforeseeable events. Review and manage them regularly.