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| Debt Recovery: Improve Your Credit Score A credit score, also known as a FICO score, is a calculated number based on the analysis of your credit files and worthiness to pay bills on time. Your credit score is a variable number and increases or decreases depending on: your payment history, amounts owed, length of credit history, number of new credit accounts opened and types of credit used. Look at the chart below to see how your credit score affects payment on an auto loan.
source: www.myfico.com Your Credit Score Influences Your Interest Rate on Loans Your credit score doesn't just affect whether or not you are accepted for a loan, it also affects how much that loan is going to cost you. If you have a high credit score, you are less of a risk to lenders so they can offer you better interest rates. The information below illustrates the variation of interest rate percentages based on different ranges of credit scores. The higher the score the better, showing that you pay your debt on time and are less risky as a potential borrower. Consumers with scores below 600 are generally charged high loan rates. If a credit score is extremely low, there is a chance of not getting approved or funded. Under the Fair and Accurate Credit Transactions Act, you can obtain one annual free copy of your credit report by calling 877-322-8228. Note that you will have to pay a fee to get your score. |
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