No matter how much people try to negate this idea, it is true that the happiness in your life is measured with how financially sound you are. It is a wrong concept that only rich people can be happy. A person with a lot of money is not a rich person. The true rich person is who manages his/her finances well. You can buy just about anything you want while having a regular daytime job. All you have to do is manage your borrowed money well and return it on time in order to keep enjoying this benefit. However, when you go shopping for credit, many lenders will look into your Experian credit score.
What Is Experian Credit Score?
First, you have to know that Experian is one of the three major credit bureaus in the US. These credit bureaus work under proper laws from the government to provide the lenders in the country with credit history and score of a borrower. There are many credit bureaus but the three major ones are Equifax, TransUnion, and Experian. Your Experian credit score is one of the most reliable credit scores that lenders all around the country can use before they forward you any type of loan. It is your responsibility to maintain your Experian credit score in good condition.
Consequences of a Bad Experian Credit Score
For as long as you are using cash to buy things, your credit score will not affect you at all. Why would a store owner check your credit score when you are handing over the money on the spot? However, you cannot buy everything you need in life on cash. The best example of a credit transaction is the house you buy through mortgage. When you mortgage a house, you let the bank pay the full price of it and then agree to pay the bank back in monthly installments. Your credit score goes bad when you miss these installments or when you use too much credit. There are some other factors affecting your credit score.
So, when you have a Experian credit score and you go to the bank to borrow home loan, you are rejected the loan. The rejection of the loan is an indicator that your Experian credit score is in a very bad state. Yes, there are many ways to improve the credit score but there is no quick fix. Even the best things you do will leave an impact after at least a couple of years. You also have to see that your credit issues stay on your report for up to seven years. If the bank does not completely reject your requirement for the home loan, it will minimize its risk in another way.
The bank will give you the loan but will keep the interest rates quite high. In short, the bank is cashing the risk it is taking while forwarding the loan to you. Believe it or not, your bad Experian credit score can affect you in more ways than you might realize. It is not just the home loan that will become inaccessible for you but car financing will also become nearly impossible.
What Makes up Your Experian Credit Score?
There are lots of factors that can play a major role in affecting your credit score. The first and the heaviest factor is the payments you have to pay back to the lender. If you delay them, they can have a huge negative impact on your credit score. Similarly, how much available credit you consume can also impact your credit score. You also want to use a mix of various credit tools rather than sticking to one type to increase your credit score. The length of your credit history is another crucial factor that can affect your credit score.
The longer your credit history is, the more data the lender has available to evaluate your qualification for the loan. This is the reason your credit score is not perfect when it starts for the first time. You have to know all of these factors affecting your credit score in order to help yourself build your credit score back. Your Experian credit score travels with you wherever you go. Keep in mind that too many lenders inquiring into your credit score is another negative impact on it. The more inquiries are made, the lower the credit score will go.
Can You Know Your Experian Credit Score for Free?
That’s one of the major questions asked by Americans on the internet. You want to know where you stand financially, but do you have a way of doing that? Can you see what your credit score is and what factors are affecting it negatively and positively? The answer is yes. You can know your credit score and credit details without spending any money. The best thing is that Experian has provided you with a portal on its website to get the report on your own. When you go on the website, you have to fill out a form with your personal information to receive your credit report.
While searching for your Experian credit score on the website, you can have the peace of mind as the inquiry will not affect it. Only hard inquiries made by lenders affect your credit score in a negative manner. The inquiries you are making are called soft inquiries and they have absolutely no impact on your credit score. In fact, it is considered a positive sign when you are keeping an eye on your credit score.
Since your Experian credit score can be seen without spending any money or providing your credit card information, there is no reason why you should not take advantage of this amazing option. Once you know your credit score, you can always approach the lenders with confidence. You can also stop fake companies from trying to make money from you by telling you that they can improve your credit score. What if your credit score is already normal? You can know that only when you search for your Experian credit score on the website without paying a penny.