What is your credit score meaning? Most of us realize how important your credit score is when it comes to buying a home, car or getting some kind of loan for anything. But when you say the word “credit score”, what does it actually signify? A credit score is compiled from your credit report and grants a lender the power to decide whether they should give you a loan for their product or service.

First of all, it’s worth pointing out that credit score and credit report are not the same thing, although they are connected. Your credit score is a number defined by the credit bureaus and it is designed to indicate to the lender the risk associated with taking you on as a debtor. In contrast, a credit report is the summary of your credit history and credit rating. Most financial institutions and even many employers will determine your eligibility by the report and score combined. Your credit report lists all of your credit requests, any bankruptcy, your payment history, how much credit you use and how many accounts you currently have open. What the credit report does not contain is your credit score.

For instance, some of you readers may refer FICO scores, of which may fall between the range of 300 and 850. The higher your score, the more likely you will be able to get loans for those expenses that you need to pay off gradually like cars, homes or other expensive items. And, the higher your FICO score, the lower your interest rate will be on the loan. In short, you are very much rewarded for establishing and maintaining good credit. If your credit score is low, you are more likely to be declined for loans and, if you are accepted, the interest rate you pay will be higher. Your score also determines how much of a loan you can get. The higher your score, the more loan you qualify for.

If you are a Malaysian, you need to know that there are few main sources providing credit scores and reports. The main one being the Central Credit Reference Information System (CCRIS), which is managed by the Credit Bureau of Bank Negara. In addition to this, there are other private companies that also provide credit reports, and are licensed under the Credit Reporting Agencies Act 2010. The most well known agency is Credit Tip-Off Service (CTOS), of which many banking institution in Malaysia would refer to. In general, each banking institution may have their own method of calculating and reporting so your score will not be the same for all. In most cases, these institution would calculate your credit score is based on information gathered from CCRIS and CTOS. For more insight, you may read article; What does your financial report card say about you?

It’s a good idea to keep these basics about the credit score meaning in mind. While being late on a bill every once in a while will not affect your score dramatically, especially if you have a fairly long credit history, constant delays, missed payments, too much debt or general instability can take their toll on your credit score.

Maintaining or Beating an Average Credit Score

If you are considering a purchase that will require you to take out a loan then you might want to know what your current credit score is. How you rank in terms of credit can make a huge difference as to whether you will be approved for a loan and how much interest you will be charged. Most people think that if you have debt then that is bad for your credit rating but that isn’t actually true, in fact it isn’t the debt itself that is bad, it is the way in which you manage that debt that will result in either a good or a bad credit score.

You may be fine and sitting with an above average credit score, but if you are average or even below average with your credit score then you might want to consider making some changes to try and improve that score. There are also a number of things that you should completely avoid if possible to increase your credit score.

The first thing that you should do to raise your credit score is to make sure that you always pay your bills on time. If you have trouble finding the money to pay all your bills on time, then the first priority should be your mortgage. A missed mortgage payment can really damage your credit score much more than a missed or late bill payment or credit card payment.

Next you want to change how you manage your credit cards. If your credit cards are all maxed out then this will bring down your credit score. If you have credit cards that are not used then this will raise your credit score. So one way to increase your score is to open a new credit card account and don’t use it, let it sit without being used, raising your unused credit amount and also your credit score. Don’t go crazy opening multiple credit card accounts at once, only open one every six months or so, but only ever open them if you can trust yourself to not use them. If you think you will use them and max them out then don’t open any new accounts.

One factor that can have a positive effect on your credit score is your ability to manage multiple types of credit. If you have a mortgage, a car loan, store credit and credit cards and you manage them well and always pay the minimum payments on time then this will look really favourable toward a higher credit score.

Your credit score will increase the longer you can manage your credit well. Although you can’t change the past, you can start fresh now and begin paying your bills on time, balancing a number of different credit accounts and open up new credit card accounts (but don’t use them) and the longer this continues the better your credit score will be.

Let’s just recap everything we’ve mentioned in this article. To maintain a good credit score you need to always pay your mortgage payment on time. It is preferable to also pay all other bills on time, if you can’t pay them on time then call the company to arrange an extension or payment plan.

Have some credit card accounts that are not being used to increase your unused credit amount and also increase your credit score.

Have multiple types of credit, including mortgage, car loan and credit cards, to show that you can responsibly manage multiple credit types. This will be favourable and will increase your credit score.

If you have an average credit score then you shouldn’t have any trouble being approved for a loan, however you will increase your changes and decrease the interest rate you are charged if you have a higher credit score. The interest rate charged will vary quite considerably between a person with a high credit rating and a person with a lower credit rating so it really is worth working toward a higher score.

How to Improve Your Credit Score?

Improving credit score is not as difficult as the average person thinks. With a modicum of self-restraint and some budgeting, you can repair your credit without any assistance from an outside agency. It takes more time to repair credit than it does to wreck it, but good credit is an necessity in today’s growing world.

Pay off your credit card in full every month if you can. Make it a point to not run up too much credit card debt by paying it in full. Your creditors will see you are responsible if you make a payment in full every month, which can improve your credit.

Remember that a secured card is better than nothing when it comes to rebuilding your credit. A secured card means that you’ve given the company the same amount of money that you will have a credit line for. This gives security to the lender in case of you defaulting and it allows you to start building a positive credit history. Save up your money and apply.

Sometimes things can get so bad when it regards credit that the best option for you is to declare bankruptcy. While this will look bad on your credit for several years, after that initial time period though you will be able to move forward as if with a fresh start. This will enable you to repair your credit.

Keep a monthly budget for all of your expenditures, even if you pay cash, to help you repair your credit. You’ll be shocked at how much money you might be paying for coffee, or going out for lunch at work, and you’ll be able to reduce frivolous spending and instead put that money towards your debts.

One of the main reasons why people have poor credit is they do not pay their bills on time. What you should do is talk to your bank and set up automatic and recurring payments for your bills. As long as you have money in your account, you won’t have to worry about not paying on time.

Build credit to repair credit! To show you are a good credit risk, begin building a better credit history, by applying for a low-limit credit card. You can request a lower limit than the creditor offers you – to keep it at a manageable level! Next, be vigilant about making payments on time. Don’t fall into the old trap of putting off payments! This will improve your credit scores.

To help improve your credit score you should think about using one of the many credit repair agencies that are out there. Boosting your credit score is very important when trying to obtain any type of financing. With a credit repair agency, they understand what you need to do in order to get your credit score to an acceptable level.

By requesting your own credit report, compiling your debts, and consulting with your creditors to establish payment plans, and establishing a reasonable budget in your life, you too can repair your credit history. Repairing your credit score will help make your future a brighter place, and this is a goal that you really can reach by yourself.

More Tips to Fix / Repair Your Credit

The thought of credit can be very intimidating for some people who may not know as much about credit as they would like but know how influential it can be when determining if someone will be approved for a loan or not. However, by reading the following article, you can learn some information that will help you.

Avoid closing credit accounts. You should try to keep credit accounts open because they will make your credit report better. Closing them may cause your credit to appear bad or like you don’t have a credit history. Having credit accounts that have been open for awhile can make your credit report better.

Avoid getting involved with credit repair agencies. Most of the time these companies will offer to make your credit better by consolidating your debt. These agencies will usually charge you fees that will cost you more in the end. Try taking care of the debts yourself to save some money.

Carefully examine your credit report for any discrepancies. Sometimes it is possible to have items that are not correct reported on your credit report. That is why it is important to check your report to make sure all the information is correct and accurate. You should look it over twice to make sure you don’t miss anything.

Show that you have stability with your credit. You can do this by making sure you pay all your bills on time. You can also show stability by making sure to keep long standing credit accounts open. This will show your credit history and show that you have stability with your credit.

Avoid paying a credit repair agency in advance. Many times, credit repair agencies are scams and should be avoided at all costs. You can usually take care of your credit problems on your own and without the help of a credit repair agency that will charge you an expensive fee.

To help you repair your credit you should dispute any inaccurate items on your report. Like most things in life, mistakes can be made, and that certainly applies to your credit report. Disputing these inaccuracies is as simple as sending the credit bureaus a letter as to what the mistake is. So start those letters to begin repairing your credit!

Avoid obtaining any additional credit cards. When you have an inquiry into your credit report it can make your credit appear bad. You should avoid applying for any additional credit for this reason. You should also be concerned about taking care of the credit cards you already have instead of getting additional credit.

To help repair your credit you should cut up all of your credit cards except for 1. Having too many credit cards will increase your debt to income ration and that is a negative on your credit report. Only use one card for emergency, business or travel purposes and that is it.

If you want to start repairing your credit, start paying off your highest interest debts first. These are likely the payments that are causing the biggest burden on your finances, so reducing their balances will reduce your interest payments and make it easier to meet your payments in the future. This will surely help you improve your credit!

When taking steps to repair your credit, avoid closing or even lowering limits on your credit cards. A big part of your overall credit score relates to the ratio of your used and available credit. The lower the percentage of used credit vs. available credit can give your overall score a big boost.

You do not need to worry if you are not completely familiar with the way credit works or if you are not sure how you can repair your credit. However, there is hope and you can learn the things that you need to do and correct any habits, with the help of this article. If you need help, you may consider getting help from credit repair specialist.

How To Use A Credit Repair Specialist

When you are in a difficult financial situation you may be wondering how to use a credit repair specialist. But you need to be careful. Not all companies who set themselves up under this name will help you. In fact the majority will take your money for services they cannot legally provide. They will make all sorts of exaggerated claims about their services. Seriously with all they claim they can do, you should really be asking to see their magic wand as that is about the only way they could live up to these promises.

When you make an appointment with a credit repair specialist, make sure that they offer an ethical service by following these steps:

1) They should not require payment up front for their service – this is actually illegal so if a demand like this is made, leave the office and report the company to your local authorities. You should also report them if they suggest you apply for credit in another person’s name or using someone else’s social security number or you may find yourself in hot water.

2) They should provide you with a written contract stating what services they will provide, what results they are likely to achieve and in what timeframe and the total cost to you the consumer. This contract should be on headed paper clearly stating the name and business address of the company.

They should not promise the ability to remove all negative information from your file as again that is illegal. The only negative information that can be removed is that which is untrue and you could do this yourself. They may tell you that you should write to the bureaus and tell them all the entries are a mistake as some companies will not bother to dispute this and so you could have the entry removed. This is not ethical behavior and you do not want to become a client of a company that behaves in this way.

A good credit repair specialist will outline those tasks that you could undertake yourself in order to reduce the cost of the service they provide. They will be able to explain how they can use their expertise to help.

If they appear reluctant to provide any of the written documentation or attempt to tell you that they are unable to discuss any aspect of your file without your signature on a contract, walk away. You are probably wasting your money and you could be using this cash to reduce your borrowing which will in itself help to raise your score.

If you feel intimidated by the whole financial process, make an appointment with a credit counselor in the first instance. They will help you to assess your file and work out the best steps you should take. Depending on where you live you may find a local charity who specializes in this service. Whatever it is, the choice is yours. You may get help from credit repair specialist OR you may find that you can undertake the task of repairing your own credit yourself when you gain a little knowledge and confidence.


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