Not all people know about one of those things that has a huge impression on their life, their credit score ratings. They often find out about it after it is too late and pay greatly for it.
You see you start forming your credit score as soon as you become a regular consumer which for countless people is during High School and for a lot is at least by the time they enter college. The difficulty is that they don't know what this unexplained thing is all about and make decisions that they rue financially. It really is a shame that more of this financial mumbo jumbo isn't taught to people in high school. The problem is that it is not just a problem of young people and so their teachers may not have the foggiest either.
So what are credit score ratings? Well, it is a figure that is used by potentially important people in everyone's life. It is used by banks, by credit card companies, by mortgage lenders, by landlords, and by nearly everyone else who can stand to profit from associating themselves with financially accountable people. So it is a number that attempts to evaluate how well you use your money. Unfortunately there are things that you can do that don't essentially reflect on your level of responsibility fiscally but that will damage your score.
For instance applying for too many credit opportunities (i.e. to take advantage of the 10% discount that you get on a purchase for doing so, or to get a free t shirt in college - totally not worth it!). A further thing that will kill a credit score is being late on one of those things. You can just do it once and take a big hit in your score and a lot of people just don't understand the kind of consequence it will have on their credit rating.
One more thing is disputed charges. Frequently a person will be wrongly charged for something or have other disputes about a fee and end up not paying. Chances are the amount of money in question is not worth the damage that it will do to the credit score and the resulting extra costs that this incurs.
So what are the advantages of having an outstanding credit score ? Well people are more willing to loan you money and on better terms (i.e. lower interest rates, cash back deals, interest free periods, etc.) You are also looked upon more positively by landlords and other essential service providers. You get better deals on insurance, better interest rates on home mortgages, car loans, and on.
Take my advice and be very aware of your credit rating and work to improve it. Pay your bills on time all the time! Get your score regularly and make sure that it contains no errors.
Borrow only when you need to do and in amounts that fit your needs. Keep track of your spending and spend within your capacity. Don't use credit cards unless you are going to pay off the balance each month or you are able to at least make the minimum payments.
By paying your bills on time, not applying for every credit card presented, and keeping track of your credit score ratings, you will have advantages that someone with little or no credit rating might never realize.
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