Introduction
Credit risk is measured using a credit score, and the number representing your score is determined by taking into account your credit history and then comparing it with that of other consumers. How financially stable are you? This question is easily answered by your annual credit report. In short, your score will tell a financial company or a potential employer how financially responsible you are or if you have the capacity to make your promised payments on time.
Step 1
To get your annual credit report, just log in to annualcreditreport.com and you can make a request there. You are eligible to apply for a report once annually for free. Companies responsible for providing this information are Equifax, TransUnion, and Experian.
Step 2
The Fair Credit Reporting Act (FCRA) empowers you to this information. The annual credit report will include any and all financial details ranging from how you pay your bills to whether you have filed for bankruptcy. Quizzle.com and Creditkarma.com are other portals were you can get you annual credit report information for free if you register online.
Step 3
So, what is a good annual credit report score, and how do you proceed in getting one? The answer is as simple as the question. Prompt and on time payments of your credits, bills, etc will get you a score above 700 which is considered as a good score.
Step 4
Annual credit report score ranges from 300-900, and 850 is considered as the perfect credit score, while a score of 720 or above will ensure you the best purchase options for a car or a house or to get the best deals for a loan.
Step 5
An annual credit report score of 620 and lower is defined as a bad credit score. If you break up the factors that determine you credit score, then attribute around 35% to your payment history, 30% for the ways in which your credits were utilized, 15% for the duration of the credits in your hand, 10% each for the type of credit and the credit enquiries that you have made.
Tips
Following some golden rules will get your score to rise.
Pay your bills on time. Carrying high balance on your credit card is not advisable.Never go above 1/3 of the total credit limit that you have.Spread out you credit options through loans, mortgages, car lease etc.
Things that can negatively affect your credit score are using your credit card recklessly and crossing you credit limit, making delays in enquiring about your credit balance, delays made in payment of your credit balance, and an absence of credit reference. Do any of these things and your annual credit report score will dip below the 600 value, creating new hurdles in your financial affairs.
Sources and Citations
You will need a co-signer if you apply for mortgage, and some kind of security will have to be offered to get your mortgage passed. Getting loan for your house will become extremely difficult with a score that’s below 600. Be wise, spend cautiously and follow some basic rules, your annual credit score will be a healthy one and you will have some of the best financial deals at your door step.
