5 Things you NEED to know about your credit score

These days, there are so many discounts, rewards, coupons, and whatnot that people get from various sources. Many get from spending time or visiting a certain place like clothing shops, restaurants etc., by being old customers, this happens. Some might get a discount on the next suit they buy or the next meal they are about to eat from their favorite place they visit almost everyday. How does it happen? By using credit card and through a good credit score.

Many get these discounts, rewards, coupons, etc. from their credit card’s credit score. Many people these days, even people who just graduated from college have credit cards, but they aren’t aware of many things about their credit score. Credit score is important because with a good credit score you can get numerous things that are vital for your practical life i.e., loans, discounts, security etc.

What are those things? There are several, but in order to be ready for your practical life, you have to know the following 5 things about your credit score.

1. You getting loans depends upon your credit score. The one thing that loan lenders and banks in general look at before giving someone a loan is their credit score. If the three digits of your credit score aren’t good then you won’t be able to get a loan for your business, car, house, or anything else. Having good credit score can help you get all these things.

2. Credit report determines your credit score. You have the right to check your credit report once a year. It is recommended you ask for your credit report thrice a year to make sure you get it so that you can know your credit score is in check.

3. Fixing your credit score is all up to you. This is one thing that many people aren’t aware of. They do not know that credit card issuers aren’t responsible for keeping tabs on your credit score, it is you who has to take care of it. A credit score is like a grade, and a grade is entirely dependent upon you instead of someone who has given you instructions to keep a good score. Therefore, it is you who has to see if there is a payment you haven’t made or have made, or if there is anything else wrong in your credit history—all in all, you will have to rectify it.

4. You will get credit checks from your landlord and employers. Having your credit checked is a surefire way of knowing if you can pay the rent periodically or if you have been a good employee while working for your previous company. Therefore, keep tabs on your credit score, try to avoid over spending, keep it in the 30% credit card utilization ratio and you will be able to buy products, get a new place to live in, and a new job to work at. It should be noted that not every landlord, employer, or business does this—only some do it for security.

5. Don’t overspend, it will decrease your credit score. Spending more than the credit utilization ratio can decrease your credit score, many people aren’t aware of this simple thing. Hence, only spending 30% of your credit card limit is a good way to build credit score.

These are 5 things that you needed to know before you embark on your practical life as they are essential in this day and age where money has gone digital and there are checks and balances in every area of life.

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