ou may not even be aware on, for example, cars or get good
that you have a credit rates of interest on loans.
score, but if you’ve ever
applied for a mortgage, a car If, however, you have a poor
loan or even had utilities, such credit score, you will find it
as gas or electricity connected harder to qualify for certain
to your home, it’s likely that offers and the interest rates you
your credit score has been pay are likely to be higher.
checked. Basically, the higher your credit
score – the more desirable you
A credit score is effectively a are as a customer to someone like
‘risk-assessment’ carried out by a mortgage lender.
a lender to see what the
likelihood is of you either Roughly 35% of your credit score
paying or defaulting on your is determined by your bill-paying
bills. It is a mathematical history: late payments,
formula that compares your bankruptcy, late collections etc,
bill-paying history with the can all give you a low credit
histories of millions of other rating. It is generally checked
people. over a two-year period and it is
the more recent debts that carry
It will compare your debts, your the most weight.
credit history, the length of
your credit history, new loans Mortgage lenders also take into
and anything else considered account your income and your
relevant. The resulting figure potential earnings in the future.
tells lender whether you have a
good or bad credit score. If Someone with a poor credit score
yours is good, you are likely to may find themselves being refused
be accepted for certain offers a mortgage, based on the
calculations involved in their carefully, it is possible to
credit score or will find accumulate ‘points’ and change
themselves paying a higher rate the nature of your rating, making
of interest than someone whose things like a mortgage or a
history makes them ‘less of a remortgage much more viable
risk’ or a more desirable options. Simple things, like
customer. ensuring that loans or debts
payments are met on time can
Even if you have obtained a positively affect an impaired
mortgage, an adverse credit credit score.
rating can make it harder to
remortgage - especially if your Even keeping an eye on your
credit score is impaired by credit card can have an effect;
defaulted payments to the current mortgage lenders view people who
lender. owe smaller amounts on many
credit facilities as being in a
It is possible to improve and lower risk bracket than those who
even recover a low credit score. owe large amounts on relatively
Credit scores can be applied for fewer.
and then it is possible to see
where there are problems; for Careful credit management, over
instance a bankruptcy can remain time, can raise your credit score
as a factor in a score for up to to a level where potential
10 years and can have a lenders can view you as a
significantly adverse effect. desirable client.
Yet by managing finances
About the Author:
Tom Mead is a qualified mortgage advisor writing bad credit mortgage editorial helping people remortgage with bad credit.
Read more articles by:
Tom Mead
Article Source: www.iSnare.com 
