Today, majority of banks are very careful to lend money only to the right people - especially those with good credit scores.
As a matter of fact, not only will you land credit card deals, but getting good mortgages and loans are also some of the perks of having good credit.
But how do you get good a good credit score? There are three credit bureaus that collect these credit scores in the United States: Equifax, Transunion and Experian.
They're the ones who collect the data of your credit records and keep track of its activities.
A free copy of your credit report will be given to you every four months.
Understanding your credit report score will help you keep track of your financial status and stay away from bankruptcy.
The relevance of understanding your credit report score is that it will help your creditworthiness from dropping.
Your credit report also reflects your current financial activities, which makes up your credit history.
A good credit score is your pass to getting loans and such.
Your FICO scores are usually used by banks and moneylenders since they're very accurate.
To have a deeper understanding of your credit report score, you should know the standards they use in creating your credit history.
Your reports contain opened accounts and updated accounts within six months, and are some of the factors used in computing your credit score.
After these computations are done, a three-digit score determines your credit risk.
These scores are categorized from highest (850) to lowest (350).
If you have a score above 780, you're considered as above average.
If it's around 690 to 779, then your credit is stable.
However, if you fall below 690, it's a warning sign that you may need help.
People with credit scores below 629 usually have difficulty in getting loan approvals and good interest rates.