How does your debt affect your credit score?
It is very hard to understand exactly how credit reporting agencies come up with credit scores. You can certainly contact them and ask to find out exactly what it is that they are looking for. Credit bureaus also offer some free debt advice to you, so when you make the call find out what services are free for you and which ones are not.
Your credit score basically represents your current financial situation. The higher your score, the better you have been at paying off debts and the more likely you are to continue paying off those debts. It is possible that credit bureaus can make a mistake and report wrong information on your credit report. That’s why it is important to look at your credit score regularly to make sure there are no errors.
Your credit score is now required by law to be provided once a year at no cost to you. This would be a good opportunity to receive debt advice if needed. Your report will show all of your open accounts, loan amounts, savings, job history, etc. for the previous 6 years. It’s important to maintain a good credit score because this is how lenders determine your ability to pay back money being lent to you.
