Credit Score: What is it and how do banks see me?
Do you know what the credit score is? Think of it as a score that goes from 400 to 850 points and that the Bureau assigns you. This number summarizes your credit history in three figures and rate your behavior in relation to the credits you have requested. When your score is low, it appears red and when it is high, it will appear green as an indicator that you have paid those loans in a timely manner.
How does the credit score work?
According to Coru, the score is modified according to the behavior you have had with your credits. That is, the first time you took out a card, your score was low because you had no experience. From there, you build it and make it grow with good practices such as timely payments, job stability and how often you have acquired different types of bank financing or with financial institutions.
What can I do with a good credit score?
When you have a score above 650 and that result has a green color, financial institutions will see you as a potential client because they know you are good at paying your monetary commitments.
The better your credit history is and, consequently, your score, the interest rates when acquiring financial products will tend to fall, as the risk of not paying also decreases.
Thus, if you have a credit card, you use it constantly and you also pay on time, banks could offer you another with a higher credit limit, lower interest rates and exclusive benefits. At this point, you become the person they want to have as a customer and for that reason, you are in a position to decide what type of credit you want and how you want it.
How can you maintain a good credit score?
- Keep your payments up to date: the important thing is to pay your credits as agreed. Never be late, the key is to get a financial product that fits your economic possibilities and not that is above them. If at any time you get behind with the payment, find a way to regularize the account as soon as possible so that your score is not affected.
- Keep your credit history active: if you don’t have an active account with a financial institution yet, you could start doing it. It is important that you stay informed about who could give you the best commissions to have your first credit card. Usually when you don’t have experience with credits, department stores offer a card to start this tour and once you’re there, keeping that habit will make your score grow and hold.
- Know your finances: You must bear in mind that the monthly consumption of your card does not exceed 50% of your credit limit. Usually, banks offer very high credit cards and, not because you already have it, you should spend it to the limit.
Remember that whatever option you choose to start your history, the responsibility with the court dates and the amounts to be paid will keep you in the game and with a very good score. If you acquire a good financial administration, soon you will be able to train yourself in the culture of credit, savings and its benefits.
How can you know your score?
To know your credit history and specifically your score, go to the Credit Bureau page and make the request. They will ask you for very specific information, the number of your active accounts, credit limit, auto or mortgage loans and also the folio number of each one of them. You can request this history once a year for free, and if you include your score it costs $ 58. Do not make many inquiries as this action could affect your score.
The important thing is that you keep in mind that like any financial product, the money you have available on a credit card or when requesting a loan does not belong to you and this activity implies a lot of responsibility. Before accepting any type of credit, evaluate all the possibilities plus your ability to pay. Thus, you will avoid falling into problems of over-indebtedness and backlog, it will improve over time and you will always have access to better loans.