Why is a Great Credit Score Important?

FOR IMMEDIATE RELEASE
Los Angeles, California, United States of America (Free-Press-Release.com) March 31, 2011 -- Credit scores affect your ability to get loans, mortgages, and low rates on things like insurance. It is a summation of your financial life starting at the point when you were approved for your first credit card. Each credit account that you have opened shows up on your credit report and will raise or lower your score whether it is in good standing or not. People you do business with may have different reasons for acquiring your report, but having a great credit score shows companies that you are responsible with your finances.

Most people don't realize that a credit score can help or hurt their chances of renting an apartment. It is common practice for landlords to check the credit of their rental applicants. Landlords most likely will not be as strict as a lender, but if there is a choice between 2 potential tenants with one having a fantastic score, the individual with the mediocre credit will probably lose. The 3 digit number just makes a difficult decision a little easier. A good score is not a perfect indicator, but it can give a landlord, employer, or lender, a pretty good idea of a person's financial habits.

The best way to keep your score from dropping is to make sure all your bills are paid on time. Payment history constitutes about 1/3 of your total score, so late payments are going to affect it negatively. Carrying a balance will also show up on your report and is an indicator to businesses that you might be struggling to pay off some bills. It is also important to not spend all of your available credit. Spending more than 30% of your credit card limit might mean that you are extending yourself further than you should. This makes up part of your score called "credit utilization".

Once you learn the basics of how credit reporting operates, it is easier to have "prime" credit. Having a score in the prime category is one of the main factors that a lender will look at, but far from the only one. They will also focus on things such as income, current employment, and the amount of cash you have in your bank account. So if this entire financial picture looks good, you should have no problem getting what you need.

More information can be found online at http://greatcreditscore.org

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