The Importance of Good Credit

If you’ve heard the term “good credit” but wondered what exactly that means – and how to attain this lofty goal – you’re not alone. Your credit refers to the score lenders use to determine whether you qualify for a loan and how much you qualify for. The FICO system assigns a number, from 300 (extremely poor) to 900 (perfect credit). Most people fall within 550 to 750 points. As the following chart shows, your FICO score depends on five factors: payment history, amount owed, length of credit history, credit history, and types of credit. Asking for help with debt may hurt your credit score, but doing nothing – or continuing to pay just the monthly minimum – will lead to poor credit, especially if you’re just using one card to pay off another. To improve your credit, you must improve your debt-to-income ratio, and paying off all of your unsecured debt can help. Although The Debt Negotiation Company is not in the credit repair business, its plan can help improve your debt-to-income ratio and reclaim your life.