Introduction
What is credit factoring? If you have previously applied for credit, auto insurance or even a cell phone then you must have dealt with credit scores and you must know how important they are. Basically a credit report is comprised of your financial transactions and includes your credit history report. It is more of a score card that is used to establish if you are credit worthy. Credit scores are arrived at using complex credit factoring formulas; the calculations are based on your recent credit history. They also look into debts and any loans. There are three major credit bureaus- TransUnion, Equifax and Experian, you can check their websites and they should give you a credit report. Apparently these three digits can shape the future of your financial life and it is up to you to guard them. Understanding credit factoring and keeping tabs of your scores can lead to financial freedom and this way you can enjoy better credit facilities.
History
Understanding credit factoring
Scores range from 300 points to 850, a score higher than 680 is generally considered good. An above average credit score is essential for getting low rates on all major purchases. Credit scores depending on your credit habits hence it is advisable to stay clear of pitfalls that could blemish you credit report. There are numerous credit factoring formulas used by retailers, insurance firms, creditors, lenders and even bankers. Scores can vary depending on the formula used, for instance the insurance credit factoring could differ greatly with your credit score. Having a credit report helps you to monitor your credit situation and explore ways to improve it if it less than perfect.
Features
What are some of the ways you can improve your scores?
1. Paying your credit card bills and outstanding loans in good time.
2. Not have more than 5 active credit accounts
3. Ensure that your balances are low
4. Stable use of credit
5. Not going above your credit limit
6. Having your accounts open for a reasonable period of time
7. Do not apply for many new credit accounts, this will negatively affect your scores
Tips and comments
Whenever people are faced with a bad debt situation they opt to file for bankruptcy since they think it’s an easy way out of their debts. For starters you need to understand a bankruptcy charge will greatly affect you scores, almost to a point of no return. Lenders will not even want to look at you twice if you have filed for bankruptcy and those who do will charge you very high rates. A credit report should be an indicator of your credit habits and that is why you should constantly check your scores. In case there are any red flags deal with them before the situation gets out of hand. If you a below average score, explore debt consolidation measures which will buy you time and give you a more flexible mode of payment. It is advisable to have a few loans and open credit accounts, this also helps you to manage them better and avoid the temptation of impulse buying.
