A credit check score starts to matter when you need to borrow money. Borrowing money is not necessarily something most of us would choose to do, unless we had no other options. It seems to be a part of life, but like all things, we need to use it correctly or suffer the consequences! So if you’re thinking of buying on credit or getting a loan, make sure your credit check score is as high as possible, you’ve compared the options, and you’ve determined if you’ll be able to afford the repayments.

Your credit check score is seen every time you apply for credit. Sometimes they reject you and you can’t help wondering how fair this is. But the truth is that creditors are in business and only interested in making a profit, not doing favors. So when they check your score, they will be able to determine if it is a risk or if it is a worthwhile investment.

What are the ranges for a credit check score?

The credit check score scale is set up in a strange way. I’ve heard of people getting excited about a score of 560, until they realize how low it really is. Knowing what your score means when it comes to getting credit will help put a little perspective on your chances.

The highest credit check scores are at and around 750 and 850. If you have your eyes on the 850 mark, it will be pretty hard to come by. Must be in best behavior for at least 7 years. Mind you, a score of 700 to 750 is also considered good. If your score is above 700, you shouldn’t have a problem getting credit at very competitive rates. Keep paying those bills on time …

A credit check score between 600 and 700 is more average. You will find that most people are in a round of this score. Loans will be harder to come by, and interest rates will not be great. It’s not the best, but it’s still much closer to where you want it to be. Check out your report to see where you can improve your score. However, be careful; the closer it is to 600, the harder it is to get credit.

A credit check score below 600 to 300 is not good. And anything under 500 is terrible. If your score is that low, you will need to start working towards a higher score. If you are lucky enough to get any type of credit, you will be paying through the roof in interest rates.

Where can you find your credit check score?

You are entitled to a free credit report once a year every year. The report may not show your actual credit check score, so you may have to pay a small annual fee for full access. However, your credit report will show whether you have kept up with payments, which companies you have credit with and how much, the addresses you are associated with, etc. This information is also useful if you suspect that fraudulent action is taking place on your behalf. To view your credit report, visit annualcreditreport.com, it’s free and with no strings attached.

If you are going to start repairing your credit, I recommend that you check your complete credit report with all the credit bureaus in your country. This may cost a bit more, but it will help you identify any errors and allow you to begin correcting and cleaning your credit check score.

Try to avoid free credit report offers as they generally end up being anything but free. They will ask for your credit card details and will start billing you monthly after a certain period of time. Do your research before paying a business for your report and credit score.

Factors influencing your credit check score

There are numerous factors that play a key role in your credit check score. Some of the most obvious include paying your bills on time, never missing a payment, and staying within your limit. You may also want to familiarize yourself with credit check score myths, such as closing your account will increase your score, when in reality closing a credit account will significantly lower your credit check score. Knowing what information is correct and what is just a myth will help you determine what to do if you plan to increase your score. Your score is roughly calculated through:

Any balance due on all of your credit accounts.

The amount of outstanding debt over the total amount of available credit.

How long have you had credit in your name

If you have any late or late payments

How many times have lenders viewed your report

Each of these adds up to a certain percentage of your credit check score. So if you are targeting the 700-800 benchmarks, you will need to keep an eye out for these factors. Keep balances owed to a minimum, while maintaining some type of credit on your account. Keep paying bills on time and try not to apply for too much credit as well. If you follow these simple guidelines, you will gradually start to increase your credit check score.

How and where do creditors get their information?

Creditors get the information they need from a variety of sources. Some of your information is provided through an application form and the rest is provided through the three major credit reference agencies; Experian, Equifax and Callcredit. Banks, mortgage companies, and other organizations submit data about your lending activities to consumer reporting agencies for their final score.

Your application form will provide lenders with critical information about your salary, address, whether you own a home, and the reason for the loan. Please fill out this application form correctly, as any incorrect information could cause your application to be rejected.

Who can see your credit check score report?

The Fair Credit Reporting Act (FCRA) specifies who can access your credit report and why. The FCRA states that a business must have a legitimate reason to view your credit report. Any organization or individual that fraudulently obtains a copy of your credit report can be fined and jailed for up to one year.

Creditors

Employers

Governmental agencies

Potential owner

Insurers

Court orders

Third parties requested by yourself

Credit bureau members must sign a contract stating that they will only access credit files when considering individuals for extensions of credit, employment, or other legitimate business purposes. It is also important to note that if any of the above organizations see your report, it will be considered a difficult investigation. Difficult queries will lower your score, but if you ask to see it yourself, it will be a soft query that won’t hurt your score.