There was a time when deciphering my credit report was akin to finding a needle in a haystack. There were so many figures and credit jargon I have never come across in my life before. So it was quite a struggle for me to interpret all the data on my report.
Have you been in such a situation above? For people with limited knowledge on economics and finance, interpreting credit report correctly is somewhat perplexing indeed. There are several numbers involved, each with a different meaning.
But worry not! Take your time for a little reading and I hope you'll have more insight on the subject matter.
Understanding the Credit Score Scale
As people are becoming dependent dependent on credit, neglecting the importance of your FICO score can be very detrimental to their financial health to the point where getting loan of any kind is almost impossible without a decent score.
That is why it is important to understand the credit score scale, how it is calculated, and what is considered a good score.
I have seen someone ignorant of his score and was rejected for a loan application for the umpteenth time as no lender was willing to take the risk to loan any amount to him. And even if he were to get the loan, the interest is likely to be significantly higher as the lenders will want to offset the risk of lending due to his poor credit rating.
The lesson we can all learn here is that since FICO score is an estimate of one's credit worthiness, it is therefore a fact that the higher your score is, the lower the risk is to the lenders and the easier you'll obtain a loan of any sort. Conversely, a low score could result in much higher interest rates or having your application rejected outright.