For a start, having a poor credit score can limit your access to credit. This means that getting approved for a car loan, mortgage or even a same day loan might be impossible for you. Additionally, a low credit score might give you issues the next time you look for a house to rent or even apply for your dream job. Some people consider a poor credit rating as an indication of your inability to manage your finances.
While we are not advising you to start obsessing over your credit score, it’s important to request for your report regularly, review it and make sure it depicts the correct information.
Your credit score depicts your ability to manage different lines of credit. This includes items like credit cards, mortgages, car loans and even utility bills. If you want to apply for any form of financing from your bank, they will probably want to know what your score is. Knowing your credit score enables you to take steps to rebuild or improve it. You need to know what your current score is so that you can understand what effort is required in order to get it up to a desired level.
A credit score is just a 3-digit number that tells you how well you have managed credits in the past. If you have a score that is higher than 700, then you can consider yourself lucky as this is an indication of a good credit. If your score is coming at lower than 600, you are simply regarded as having bad credit. Banks and other lenders will take extra caution when giving you a loan or any other form of debt. Sometimes getting approved for any form of financing if your score is lower than 600 might be impossible.
Remember that loan applications will not be denied or approved only based on your credit score. You may have a high credit score but still get denied a loan or a different financial product. In the same way, a low credit score doesn’t sentence you to be credit-less for life.
What can you tell by reviewing your credit report
The credit score is only a figure that quickly estimates your credit worthiness. On the other hand, the credit report is a list of items that attempt to display how you have used credits in the past. You will find information on your credit card accounts and personal loans you have taken before in your report. Any lines of credit or mortgages you may have are likely to be on the report. If you go through your report and notice errors that may have a negative impact on your score, hire a company that offers credit repair Toronto for help.