Do You Know Your Credit Score?

By: David Hall

The average credit score is between 600 and 800. Your credit score is mathematical formula which is based on information in your credit report compared to other individuals. If your credit score number falls between excellent and good, this gives you the benefit of getting credit at a lower interest rate. Creditors uses credit score to predict how likely you are to pay your bills.

Individuals with bad credit may not be able to obtain credit conventionally. These individuals may have to apply for a pre-paid credit card to re-establish their credit over time. In this case the funds they are using belong to them and not the issuer of the pre-paid credit card. The credit limit is the amount of money they loaded to their pre-paid account. Prepaid Credit Card spending limit can only be made up to the balance in the account. There are no interest or finance charges on a prepaid card.

Prepaid credit card can be very beneficial since it gives you an opportunity to rebuild your credit history and being able to make purchases just as if you had regular credit card. Make sure that the company you obtained your pre-paid credit card reports the payment history to the three main credit bureaus.

Credit Bureaus Websites:



Trans Union

Credit Scores:

Excellent credit score 750-850

Good credit score 660-749

Fair credit score 620-659

Poor credit score 350-619

It is important to know your credit score before applying for a credit card, car loan or a mortgage. This will give you a good idea how much interest the loan will cost you over time. Creditors look at your credit score in deciding whether or not to increase your credit limit or charge a higher interest rate.

Some reasons why your credit score isn't higher than it is:

Too many accounts with balances owed

Poor payment history or past delinquency payments

Owe too much debt on existing accounts

Opened too many accounts in the last twelve months

Past collection history

How to improve and maintain good credit score:

Closing unnecessary accounts and consolidating your bills to make payments more manageable will help in increasing your credit score.

By not applying for too much credit within a short period of time is another factor that will help in maintaining a good credit rating.

Consistently paying your monthly payments on time will eventually re-establish your credit and subsequently will increase your credit score.

David Hall is a contributing author for Visit his website and read some of his interesting articles about credit cards. This article is free to publish in its entirety and must include all links:

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