Your Credit Report Score And What You Should Do About It

July 4, 2012 by  Filed under: Credit 

Your credit report score is very similar to your report card back in school. It is an evaluation of your performance, particularly of your financial behaviors, that allow financial institutions to gauge whether or not it will be risky to have you as a client. Similar with the report card, your credit report score is used as a basis for the types of credits and services institutions will be willing to provide you with. As all of us know, it is hard to dispute what is written on that report, and try as owe might to explain our end, the report will still be the primary basis for the acceptance of our requests.

Any person with a clean credit report can expect to be granted loans and higher credit limits. These people will actually be offered credit cards or other services even if they had not requested for any such amenities. On the other hand, those with low or bad credit report scores have a hard time applying for loans or credit cards, or even if they are granted such services, they will probably be given a higher interest. This is the step that financial institutions take to shoulder the additional risks involved in providing loans and services to those who have a history of delayed payments or unsettled accounts.

On the individual’s end, it would almost seem pointless to make up for any mistakes done in the past because records of delayed payments, no matter how small, can stay on your record for up to seven years and will continue to be negative on your score. Thus, it is important to know and understand that this payment history is actually not the only factor that dictates your credit report score.

There is not much to be done with payments history because as the name suggests, it is history and anything that has been done in the past cannot be undone. However, other factors which you can do something about are the amounts owed, how long the account has been held, the types of credit accounts you have, and whether or not you have applied for a new account.

Having a smaller amount owed or basically using up only a small percentage of your available credit limit is a good way to improve your credit report score. Not only does having a small amount owed make it easier for you to settle your debts, it also shows that you have very minimal need for financial assistance and that you can mostly handle your financial requirements without any help from creditors. This means that you have sound financial resources and that you can manage those finances well.

Another aspect you can do something about is whether or not you have applied for any other credit accounts. Applying for credit means that you are in need of financial assistance. The type of credit account you apply for is also important because it shows the kind of need you are in. For example, if the request is foe a simple credit card, it will only have a negative effect on your credit score because it shows that you need more financial assistance to cover your monthly and even daily expenses. If the request is however for a mortgage, it will be more understandable that you will need financial assistance in acquiring a home.

All in all, there appears to be very little we can do about credit report scores, but there are still things we can do about it. Although it is not advisable to dwell on the past, at the very least, these records should teach us to be mindful of how we handle our finances in the future.

The author gives advice when it comes to getting credit reports in South Africa. To read more visit

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