Understand what credit score is and how important it is

In the modern world, sometimes it may be more important to have credit than to have some money available. Have you noticed how fast it is for some people to release funding, while for others the answer is almost always negative?

These things happen even among good people. These are experiences through which serious citizens and individuals of their social duties. But why?

What is the reason for a credit being granted to one person and denied to another? In other words, why are two people of the same socioeconomic level treated differently when it comes to getting a loan, for example?

Continue this post and understand what credit score is and how important it is!


What is credit score?

What is credit score?

Your business and financial experience speaks for you. This means that the purchases and payments you make, as well as your bank account history, are all elements that may score against or in your favor.

Similarly, your relationship with your credit card has a marked effect at this time. Consume and pay on time or have difficulties to pay the total bill are situations that also punctuate, more or less.

Thus, the credit score is the measured result of all variables used to score your economic life. For the market, this is a risk assessment that would represent a financial transaction with you. For this reason, it is called credit or financial score.


What is your importance?

credit score

Your credit score measures your ability to honor your business and financial commitments. So the higher it is, the easier it will be for you to get credit because the market will consider you safe.

Here, therefore, lies the major importance of the score: it gives the financial or business institution more security to negotiate with you. In other words, your score can be a positive business card about you.

Thus, developing a financial awareness and keeping your accounts up to date can bring you extra benefits.


Where and how is it used?

credit score

Usually, banks and other financial institutions, as well as commerce and other companies make use of credit assessment by consulting the score.

But it is not just your financial transactions that are verified. The existence of judicial executions, protests and bankruptcy, among others, are part of the calculation of the score.

In turn, the credit score is measured on a scale from 0 (worst) to 1,000 (best). The closer your score is to 1,000, the easier your credit approval will be.

In general, the market considers the bearer of a score above 700 to be low risk. This makes it easier to negotiate.


How to check yours?

credit score

The credit score can be consulted for free on the websites of institutions such as Serasa and Boavista SCPC. A simple registration, a password and you’re done: you can already know your score.

You can also take a few lines of conduct and care to build a high score that is an excellent business card for you. So start negotiating your debts, if any. At the same time, always try to keep your bills up to date without any delays and avoid applying for multiple loan times.

If you would like to know what a credit score is, you will definitely like to know more about personal financial education.

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