Credit Scores
These days, people will often use credit to make their purchases – especially with big-ticket items such as cars, electronics, or vacations. Without a good credit score, an individual may pay more for these items or may not even be able to purchase them at all. For this reason, it is important for credit card owners to maintain a good rating by paying all their bills on time and not accruing any outstanding debt. Those who have filed for bankruptcy in particular will see a huge drop in their credit scores.
What is a credit score?
Your credit score is a three-digit number that considers and weights the following factors in order to give you a basic “creditworthiness” (ability to pay back what is owed) rating:
- Payment history (late payments, etc.)
- Outstanding debt
- Amount of time you have had credit
- New credit
- Current types of credit
The higher your credit score is, the more likely you are to be trusted by banks and creditors and the more flexibility you have, financially.
The FICO Score
FICO, a method of scoring credit developed by the Fair Issac Corporation, is the most widely used form of determining one’s creditworthiness. Under this method, one’s credit score will fall between 350 and 850, with a higher score indicating a better ability to pay back debt. Most Americans fall between 600 and 800. Scores of 720 or above are looked upon very highly by crediting agencies.
Contact Us
If you would like to learn more about credit scores, or if you would like to get more information on how to improve your credit score, please contact the Austin bankruptcy lawyers of Slater, Kennon & Jameson, LLP today at 512-338-1100 to schedule a consultation with one of our qualified attorneys.