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Quick Answers...Finance/Credit |
Is my credit report important?
Despite lenders' willingness to hand out money, a good
credit record is as important as ever. Nearly all lenders
have come to rely heavily on computerized profiling to
determine what credit they're willing to extend to a
potential borrower. Information comes from your payment
history, card balances, auto loans, retail accounts and
hundreds of other factors. The end result is a numerical
score that guides lenders in the terms they offer for a
variety of financial products.
High scorers get the lowest interest rates and higher credit
lines. Those with low or failing "grades" will get very
little and pay plenty. For them the rate on a mortgage will
be as much as 6% points higher than the prevailing rate most
credit-worthy customers get. A high credit score not only
gives you better terms today but may be important in the
future should interest rates rise and credit standards
tighten.
Written by:
Sandra McKinnon, Family Financial Education Specialist,
University of Missouri-Extension
Cynthia E. Crawford, Ph.D., Family Financial Education Specialist, University of Missouri-Extension
Last update: Saturday, April 22, 2006
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