If you have recently applied for a loan or credit card and you were denied, you might be asking yourself, Why does my credit score even matter? Your credit score is a number that is often used by lenders, creditors, banks, and many others to help evaluate and rate how much of a risk you are to loan money too.

What does your credit score really mean? Well, this is the number that tells people how responsible of a person you are when it comes to your credit and how you manage your finances. It’s a number that is taken from a statistical analysis of the items that are listed on your credit report and a part of your credit history. When one of the three major credit reporting bureaus looks at your credit report and evaluates it depending on many different items, such as on time payments, late payments, high credit balances, how much credit you currently have, and legal credit matters.

It all boils down to how much trust a loan provider or creditor has that you will pay your bills and pay them on time. All most all credit reporting bureaus will ask themselves two questions when it comes to loaning you money or credit. The first will probably be; are you going to pay your bills based on the information they see, and secondly; are you going to pay those bills on-time or do you usually pay your bills late or not at all? If you seem to be more of a risk, a business may not take the chance knowing you may not pay back the loan on time or at all. Put yourself in their shoes for just a second. Would you want to give credit to someone whose credit report shows that they pay late often?

Your FICO credit score will fall between the numbers 300 and 850. The lower the number, the MORE of a risk you will be. Just the opposite is, the higher the number, the LESS of a risk you will be. All of the information that is contained in your credit report is where this number is derived from. Lenders will also use this number to decide what type of an interest rate you will receive, if approved. The lower risk you are to a lender, the lower your interest rate will be and vice versa.

So, when it comes to credit scores, yes your number really does matter. It matters a whole lot! Do all that you can to maintain a good credit score and try raising it higher by paying all of your bills on time or even before time.

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Advantage CCS is a nonprofit credit counseling agency that currently offers a Credit Report Review service to consumers in Western Pennsylvania and in the near future, over the telephone as well. This service can provide you with a better understanding of what’s on your credit report, how to fix an error if one is found, and possible ways to improve your score on your own. Call us today at (866) 699-2227 to find out more information about this service and receive free expert consumer credit assistance from a licensed credit counseling agency.

Author: Lauralynn Mangis
Lauralynn is the Online Marketing Specialist for AdvantageCCS. She is married and has two young daughters. She enjoys writing, reading, hiking, cooking, video games, sewing, and gardening. Lauralynn has a degree in Multimedia Technologies from Pittsburgh Technical College.