Have you ever applied for a loan of some kind, such as a home loan for example, only to be refused for a reason that remains a mystery to you?
The would-be lender thanks you for applying for the loan, and tells you that they look forward to being of future service to you, but they reject your application for credit.
They never explain why and you are left feeling confused and disappointed.
So what is the big mysterious reason for the fact that you are met with rejection when you apply for a loan?
The answer is a simple one and can be summed up as: Lack of credit credibility.
That means that if your credit record is lacking in some way, potential lenders are not likely to feel inclined to want to provide you with any credit. You probably leave after your loan application being rejected, feeling somewhat confused. You probably find yourself questioning what their reason could be for thinking you would perhaps default on the payments.
The truth is that you need a record on paper for them to believe you possess the ability to pay back your loans on time. A credit record provides this information, as well as all your credit history. Unless your credit history is good, nobody is likely to provide you with a loan.
Of course, this makes you wonder if there is way to improve your credit score, and if so, how do you find out what your credit score is? The credit score is calculated based on your credit history.
Your free credit score is a 3-digit number. This number is calculated by using an actual mathematical formula.
The calculation produces your credit score and this affords potential lenders the chance to see whether you should be considered for a loan and, if so, what interest rate is recommended.
This information is based on how well you repaid your debts in the past, the interest rates you were charged, and the loans that you took.
Of course, despite the fact that a mathematical formula is used, the credit score can never let a potential lender know for absolutely certain that a borrower would be able to repay the loan at the levied interest rate. Ideally, a loan applicant’s score should be higher than 750.
If you have a less than satisfactory credit history, do not let this cause you too much stress and anxiety. There are ways that you can improve your credit score. Once you have obtained the relevant information regarding your credit history you can set about devising a workable plan to improve your credit score.
In fact, keeping up to date with your credit report regularly is very important. You need to keep track of your credit as well as you actual financial circumstances so that you can obtain your free credit score at least every two months. By simply taking these very simple steps you will notice that your credit score will increase.
The more your credit score improves, the more likelihood there will be of you being seen in a favorable light by would-be lenders. Not only will you stand a better chance of obtaining the credit you need, but you will also save money whenever you do borrow any.
In Closing – How To Get A Free Credit Score
There are many online websites offering free credit scores, however many also come with trial offers as well.
Remember that there are three major credit bureaus and each has your credit score. Search for those sites that offer information on how to get a free credit score without having to take trial offers.