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A 650 Credit Score Just Isn't Good Enough
If you have lately obtained your report and found that you have a 650 credit score, you may be worried and maybe even somewhat confused. Why does it count what the score is? Which credit bureau must you believe? What aspects influence your result? Should you even be bothered? Why does it matter what the score is?
When a new lender looks at an application for credit card debt, credit score is just one of the factors they will use to evaluate whether to lend the cash on the first hand. If they choose to grant the facility, your report will influence the credit limit and rate of interest you get charged. The larger the score the lesser the rate of interest you will pay and you may be given a higher borrowing facility. But it is not merely credit card applications that it affects.
When you come to renew your auto insurance or your house insurance, your insurance provider will also check out your credit score and may increase your premiums if he sees you to be a bigger risk than someone with a better score.
Which credit bureau should you believe? Your Experian credit score will be slightly different than the Transunion credit score which again will differ from the Equifax one. This is partly as there is no one defined way to determine this figure and partially because all 3 credit agencies use slightly different details to compile your credit report. You are best working on an average of the 3 scores. Anything you can do to increase your rating will have a positive effect on all three bureaus.
What aspects influence your result? Before you can consider raising it, you need to understand what factors affect it. The score itself depends a lot of factors but the ones that seem to have the most influence are
1. Payment history - you need to make sure that the reports filed are correct as often mistakes are made. It is estimated that this alone accounts for up to thirty-five percent of your score therefore it is important it is accurate.
2. Amount you owe compared to the credit limits you already have - if you are maxed out on your credit cards, your rating will certainly suffer. So try to get those balances down. It is suggested that you keep them to less than 35% of the available credit which is simpler to say than do! When it comes to credit score 650 is not a high enough figure so you must do all you can.
3. Number of borrowing applications - the more applications for borrowing you submit the more your score is going to be badly affected. Don't apply for any new borrowing unless you really need it and be choosy who you apply to. Select the lender with whom you have the most possibility of success.
Should you even be concerned? Indeed, yes and yes. Now you know the answer to the question is 650 a good credit score? The credit file has an impact on various areas of your life. You can enhance it if you follow the proper advice. Steer clear of any "experts" who want to charge you fees for fixing your report. It is easy to do yourself and you need all those additional dollars to eliminate the debt once and for all.
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