Why is credit scoring used?Credit Scoring Uses Many people are familiar with what a credit score is. A credit score is a number consisting of three digits (from 300-850) that denotes a person's creditworthiness. What most people don't know are all the various uses this number has. Your FICO score, first and foremost, can be used to help you plan your financial future. Once you know where you stand credit wise, you can make plans to either maintain or repair your credit. Being armed with this information is very useful, especially when you are looking to make a major purchase. Sometimes employers request your credit score along with your credit report when they are conducting a background check. Employers these days want to be careful with their hiring decisions, and one way of gauging a person's maturity and responsibility is to see how they handle their credit history. A credit report also will have past employers on the report, giving the employer a wide picture of your financial habits. In today's world, employers cannot be too careful. So, it will not be uncommon for an employer to order a copy of your credit report and score along with any other background check they perform. Other credit uses include, department store credit lines, qualifying for auto loans, qualifying for mortgage loans, or personal loans. When maintained and managed, your credit score can be a key that unlocks many financial doors for you. If you have a low credit score, you should not despair. Rather, you can take many steps to raise your credit score and improve the loans and credit accounts that you will qualify for. Even a few years ago, consumers did not have access to their FICO score, and were unable to make this score work for them. Now, you not only have the opportunity to find out your FICO score, but you can get your credit report and repair your credit through many avenues. Your credit score will help you apply with confidence when you wish to get a student loan, a car loan, a mortgage loan, or any line of credit. You'll apply confidently for employment that requires a background check as a condition of employment. In short you will have full control of your financial future by knowing and maintaining your credit score and credit report. |
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