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Chapter 2 ConclusionYour credit score reflects how reliably you’ve paid your bills in recent years. It indicates how much interest you’ll pay on loans and financing. A low credit score can means hundreds of dollars a month in higher interest rates. This is the purpose of credit scores. If you have a history of paying late, you pay more. How long your past experiences affect your score varies. In general:
Lenders don’t like to see too much debt on your credit report. Having too many credit cards with high balances makes you a less appealing risk. So does having a lot of credit cards with high credit limits, even if you haven’t run up big balances. We’ll consider all of these issues in greater detail later in this book. In this chapter, we’ve just focused on the mechanics of credit scores. |
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