You Can’t Trust Your Credit Score
Do you ever worry about your credit score? If you’re under thirty, the answer to that question will almost definitely be no. However, if you have passed that milestone, your credit score becomes rather important. It can affect whether or not you can buy or even rent property. You’ll certainly struggle to get a traditional loan for a home with a poor score on credit. But there are some other issues with credit scores that we need to be aware of. Let’s look at some of the problems and discover what the solutions could be.
Why Is My Credit Score Poor?
If this article peaks your curiosity, you might search for a site to check your credit score online. You’ll usually find that’s it’s somewhere around three hundred which is quite low. Why is this? A typical reason may be that you have never actually borrowed money. Sure, you’ve spent cash but you’ve probably borrowed from your parents or relied on them, and that’s not counted towards your credit score. To improve your credit score, you have to borrow money and then pay it back which is why those credit cards aren’t as dangerous as they seem. They can be quite useful. So, if you reach thirty without ever borrowing money, your credit score won’t be high. It could be quite poor, and that’s going to stop you buying that house. You see the issue? By not needing to borrow you could damage your chances of getting a high credit score.
Now you’re thinking, great an excuse to use my credit cards without feeling guilt. Not so fast there keen shopper, because not ever borrow will impact your credit score. Here’s where things get all too complicated. When you run a credit check, you can use a number of different companies, all of whom will be getting their info from different sources. As such, a credit score that you receive from one source can be completely different with one you received from another. So, there’s a good chance buying that new sofa and then paying the money back won’t change your score at all.
Can Scores Be Trusted?
Numerous reports have revealed that credit scores aren’t always accurate, reliable or even truthful. Again, it depends on the information that each individual agency has access too and how reliable their findings are. It’s also quite common for details to be mixed up with one person with the same name getting another individual’s credit score. This wouldn’t be so concerning, but we know you’re not the only person searching for your score.
Anyone from a potential employee to a landlord to a bank can check your credit score, and you can’t control which agency they decide to use to do it. That means that they could find your credit score is a lot lower than it actually is or even get the wrong info completely.
Learning To Live With Bad Credit
This means that a lot of us are going to just have to learn to live with bad credit. In fact, it might be more than you think with around eighty percent of people in the US alone struggling with debt. If they’re in debt, this certainly suggests poor credit scores, meaning that the people who have good credit are actually in the minority. And yes, this is an issue. It’s one we need to fix, particularly when so much of your life is based on borrowing money. Buying a house, a car or even paying the deposit for a rented place is all usually going to mean a borrow or some sort or another. Thankfully if you have bad credit for whatever reason, there are loans for people with bad credit. So, you can still get the money you need in your hand to buy or pay for whatever you want. It doesn’t have to be the massive roadblock on your path that you think.
Can I Fight The Credit Score Machine?
To be honest, probably not. Credit scores are tools that are controlled and used by the financial industry. As such, they’re not going to give them up because they show who can and can’t be trusted to pay back money owed. Arguably they are not always a fair representation of who you are or indeed your borrowing behavior. Of course, if your score is genuinely poor there are ways to improve it. But it’s just as likely that a technical glitch has left you with a tarnish that is impacting your life. Thankfully, there are ways around it.
What tips do you have for raising your credit score?