You must have heard this several times that you cannot take your credit scores and reports for granted as they can affect every aspect of your life and not only your financial life.
If you have not heard this yet, know this now that you cannot take your credit scores and reports for granted because they create trouble for you.
You may have two questions now – are credit scores and credit reports two different things and how these can affect your life.
Do not worry, as I am here to share this information with you.
Let’s start with the first question first because the topic of the post is also the same.
How are credit scores and credit reports different?
When your child enters his exams and is done with them, the examiners examine his copies and then give him marks as per what all he has written in the copies. The process of the giving credit scores is almost the same. This is based on all the payments that you make in the return of your transactions. If you make 10 purchases with your credit cards or debit cards and you make all the payments in time, then you will get the full score. Otherwise, the credit check expert will follow the set parameters for payment skips and defaults, and accordingly, he will give you the credit score.
Now, we talk about credit reports. We continue with the previous example. Your teachers give you marks, but that is not the only thing your report card involves. There are several other aspects are counted when making your report card. For example, your attendance in the class, how disciplined you have been in the class, how his behavior has been in the class…. And after calculating all these aspects, his report card is made eventually.
The very same process is followed in the credit report. Your payments history, credit mixes, the length of the credit history, amounts owed, new credits…. are counted. Once your credit report agency analyzes these facts, it makes your credit report.
As I have taken a quite simple example for the purpose, I am sure you would have understood the credit scores and credit reports, and the difference between them.
Let us now talk about the second question in this article that is how credit scores and credit reports can affect your life.
Suppose the wedding date of your daughter is set, and you need money to arrange it, but your savings account has inadequate funds then what would you do? Obviously, you will go to the banks with a loan request. But, do you think banks will sanction your loan because you need money to arrange your daughter’s wedding? No, not at all. They will check your credit history and report at that time. If the credit history is poor, then no bank will accept your loan request because every bank will have the same fear that the bank may have to struggle to get its money back from you. So, you will have towards your acquaintances for financial help. In case, you do not get any help or get help but inadequate then …
I am sure the example mentioned above suffices for you to understand how big impact this can have on your life. Therefore, I need not explain much its effect.
So, is there any way to improve the credit reports and history? Sure! Make sure you make every payment on due time. In case, your recent credit report has not been right, talk to the credit report making the company and ask them regarding how they can fix the story, or you can talk to a professional credit repair company. The credit repair company will analyze your case and provide you the best possible help.
James is a content professional. He does not like to produce any content piece by which users get nothing. He has written this blog post to help those people who are confused regarding the difference between credit scores and credit reports and take them for granted.
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