William Mizell Ford: Credit FAQ
Let’s face it. You need good credit to borrow money. The better your credit score, the cheaper it is to borrow the money you need to make major purchases such as a new vehicle. Your credit is very easy to mess up; and it’s very hard to fix. In fact, the whole thing can get a bit confusing sometimes. Our team of finance wizards is here to answer your questions and quell your credit fears.
Your credit worthiness is rated by the three credit reporting agencies, as well as FICO. The scores represent the likelihood that a person will repay their loans on time, and it’s determined by a person’s borrowing history and other variables. Below, you will find answers to frequently asked questions about credit, credit reports and credit scores. If you have any additional questions, don’t hesitate to contact our Finance Department.
What is a Credit Score?
Your credit score represents your creditworthiness. Lenders use it to gauge whether or not you are likely to make payments on time. Scores are largely based on your borrowing history. The most common type of credit score available to consumers is the FICO score, which ranges from 300-850. The higher the credit score, the more likely you’ll be able obtain credit and/or secure a lower interest rate.
What is a Bad Credit Score?
The average FICO credit score is 680. However, anything below 620 is considered a poor score, or "sub-prime,” and is less likely to be approved for loans without a considerably higher rate of interest.
How Can I Maintain a Good Credit Score?
For those who already have a good credit score, rest assured that it’s much easier to maintain a good score than it is to improve a poor one. Good credit can be maintained by adhering to healthy financial habits, such as making payments on time and shopping on credit only when it’s absolutely necessary. Avoid making dramatic credit changes and don’t close old, established accounts.
How Can I Repair My Credit?
If you have less than perfect credit, don’t fret; you’re not alone. Millions suffer from bad credit because of a variety of reasons. To improve your credit, start by getting reports from all three reporting agencies. This will shed light on what exactly is impairing your credit. Credit reports may contain inaccuracies that you can correct to help get your credit back on track. Paying down high balances and paying on time will go a long way to improving your long-term credit.