Managing personal debt is very important to not only your life but your credit itself. Some people take out personal loans to help build or even repair their credit. We will look at some vital topics about maintaining your good credit and how to repair your unsecured personal loan if the need should ever arise.
First off most people do not realize how important a good credit rating is to his / her life. With a good credit score/ rating a person does have to worry about things like how to acquire the things they might need and want. Some examples are things like a vehicle, a home or an apartment. Now days your credit score can even affect a person’s ability to get and keep a good paying job, or getting a job at all.
How Credit Score is Determined
A person’s credit score is determined by his or her buying and paying history. When a person starts out in life his or she has no credit score. The credit must be earned. When a person purchases something like their first vehicle. The monthly payment he or she makes on time are reported to one or all of three credit reporting agencies.
If the monthly vehicle payments are made on time or before the payment is due. The good payment history is reported to the credit agencies. Therefore the person buying the vehicle has and maintains a good credit score and history.
If however he or she does not make the payments on the due date or before the due date. This is not considered good payment history, Slow to make payments can damage a good credit report and good credit score.
Difference Between Good Credit and bad Credit Scores
Good credit scores are 700 or more, Fair credit scores are in the 600 range, and a 500 score or lower score needs serious repair.
Sellers, banks, and personal loan lenders look at the number on the credit score to see if your score is a good investment. If it is a low number chances are the lender, bank or seller might deny the loan or purchase. If however the credit score is a higher number then the lender and or bank is more likely to allow the purchase or loan. The more you are approved and the good credit history keeps building your personal credit score for life. Building the score makes the score number grow higher in number. Maintaining the high score gives a person the freedom to have a nice life and not to worry over problems that may arise like home or vehicle repairs.