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Are You Paying More For Your Credit Than You Should?

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If you do not take the necessary care towards your finances you could find yourself paying over the odds for the credit  you want to borrow. It is for this reason that your position on the credit score scale is very important. The scale is used to measure your credit score. Your credit score is used by banks, credit card issuers and insurance companies to determine your credit risk. This is basically your ability to pay back the credit you wish to borrow.

The more your credit score decreases the more of a credit risk you will be in the eyes of the banks and other lenders. A low score can make your life more difficult and expensive when it comes to borrowing. Low credit scores increase your chances of having your credit applications turned down by lenders. It can also mean that lenders will charge you a higher interest rate compared to those with a high credit score. Higher interest rates will increase the amount you will have to pay on your monthly payments.

In contrast having a high credit score can mean you can attain lower interest rates making your borrowing less expensive. For this reason it is very important that people look after their finances and raise their credit score. The first step in achieving this is to check your credit score. You can do this by contacting the credit collection agencies Experian, Equifax and Trans Union. They can provide you with a credit score and a credit report.

The credit score is measured on a ranking scale between 300 and 850. A good score is considered 700 and above. If your score is below the 700 threshold then, there is definitely room for improvement. Your credit report may contain the answers to why you have attained a low score. They could be missed payments are extending beyond your credit limits. There are many factors that can lower your score however, things such as missed payments are a big factor and should be rectified immediately.

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