What is vitally important about credit/debt is that it is properly understood and controlled. It may be interesting to first discover why some people can easily get credit while others may be turned down.

A lender will do some research before making a decision, and one of the main factors that will be taken into account will be your “credit score.”

This represents your creditworthiness, the probability that you will pay your debts on time, and is expressed as a number. This number is based on an analysis of your credit file. Your score is based primarily on the information in your credit report, which is on file with the credit bureaus and/or reference agencies. It can also represent information, easily obtained from public documents, such as your marital status, family situation, and who else lives in the same house as you. In the UK, if your name appears on the electoral register (list of people eligible to vote), that can add points to your score.

When you pay your bills on time, you maintain a healthy credit score. When you fall behind or don’t pay your debts, your score goes down and it becomes more difficult to obtain loans and services at a reasonable cost. Regarding late payments, due to recent changes in credit scoring methods in the US, even one day late could cost you dearly, taking 50 points off your score. Late is late, and it’s not unheard of for a percentage point or two to be added to the interest on your mortgage, so it doesn’t take a genius with a calculator to figure out that those late payments can add thousands to the cost of the purchase. your house.

Most lenders, including banks and credit card companies, will use information like your credit score to decide if you are a potential risk when it comes to lending them money. These institutions use your credit score to determine if you qualify for a loan and, if so, at what interest rate and with what limits.

Your credit score could be important for many years, so make it a habit to keep your credit file clean.

It’s a good idea to get all the advice and information you need before making a decision that could have long-term effects.