Credit score guide

While many other factors are used to determine your personal credit score, your payment history is the single most critical factor. A history of on time payments is the surest way to raise your credit score, while a history of missed payments and late payments is the quickest way to take a good score and ruin it. There is just no getting away from it, if you want to raise your credit score you need to make a commitment to paying each and every bill on time. In fact it may be a good idea to start sending those credit card bills in the day you get them, instead of waiting until a few days before they are due.

Many consumers are under the impression that paying utility bills, cell phone bills and other routine charges on time will raise their credit scores, and some utility companies have perpetuated this belief in their advertising. But the truth is that these items are generally not reported to the credit bureaus, so if you are waiting for the phone or cable company to raise your credit score you may be barking up the wrong tree. Of course it is still important to pay all your bills on time, just keep in mind that cell phone bills and utility bills may not necessarily have an effect on your overall credit score.

The world of credit scores is confusing enough, but to make matters worse creditors use a variety of different credit scoring models when evaluating would be borrowers. It has been estimated that some 96% of consumers do not know which credit scoring model applies to them. That means that even if you have been diligently checking your credit score every couple of months you still may not know the whole story. That is why it is so important for consumers to understand the different kinds of credit scoring models, and how those different models could affect their financial lives.

Everyone understands the importance of a good credit score when it comes to borrowing money or shopping for a mortgage, but what about when you are looking for a new job or trying to buy car insurance? Your credit score is used in a wide variety of ways, and everyone from potential landlords and prospective employers to your car insurance agent has access to that score. In fact your credit history follows you into virtually every corner of your life, so it pays to make sure your credit history is accurate and up to date.