Memorize These Financial Facts About Your Credit

Understanding a few financial facts about your credit can improve your control over finances, allowing you to make better money decisions. From knowing the five credit score factors influencing your score to understanding you don't need a perfect rating to get a loan, it's all important. 

In this article, we'll talk about the seven most critical financial facts for you to consider.

Remember These 7 Financial Facts About Credit

1. Five Factors That Affect Your Credit Score

Typically, lenders use FICO credit scores when making decisions. To have the best chance of acquiring a loan, it's worth being aware of the factors that influence your score. 

In the FICO system, these are the things that determine your credit rating:

• Payment history (35%) — Consistently making payments on time positively impacts your score. Regularly missing or paying late is detrimental.
• Credit utilization (30%) — This is to measure how much of your available credit limit you're using. Aim to use one-third or less to boost your score.
• Credit history length (15%) — A longer credit history improves your score. But you need to ensure you're using it well to experience the best results.
• New credit (10%) — Applying for credit means hard report inquiries which damage your score. Space out new credit applications to ensure minimal impact.
• Credit mix (10%) — Those with excellent credit scores tend to have different types of loans and credit cards.

2. Credit Report Does Not Mean Credit Score

Even though they're related, a credit score and a credit report are different.

A credit report is a dossier of your credit behaviors, including open accounts and the frequency in which you make payments. Experian, TransUnion, and Equifax (the main bureaus) publish separate reports.

A credit score or rating is the numerical representation of your ability to pay off debt.

Oddly enough, reports don't include credit scores — lenders use your report and calculate your score depending on their specific formulas. 

3. FICO Scores Run From 300 to 850

As the most-used credit scoring model, you should know where your score falls on their system:

• 300 to 579 — Poor
• 580 to 669 — Fair
• 670 to 739 — Good
• 740 to 799 — Very good
• 800 to 850 — Exceptional

Obtaining your FICO score lets you see how likely you are to gain approval for mortgages, car loans, and other financial products. Those with poor or fair scores will find it tricky to acquire traditional loans as they are deemed a risk.

4. Checking Your Credit Doesn't Harm Your Rating

It's a common misconception that checking your credit score or report will damage your credit. But that isn't the case. You have every right to obtain a copy of your report and see your score without penalties. 

Soft inquiries (such as those conducted when you check your credit) are noted on your report, but they do not impact your score. 

Hard inquiries (i.e., those lenders conduct) can temporarily reduce your score, mainly if you've applied for new credit regularly.

5. Canceling Older Credit Cards Can Lower Your Score

While it might be tempting to close old accounts, think about how it will impact your score beforehand. 

As we mentioned earlier, credit utilization plays a part in determining your score. So, closing an account could damage it as your credit limit will be lower.

6. Damaging Factors Eventually Come Off Your Report

Late payments, foreclosures, repossessions, and collection accounts can negatively impact your credit score. However, despite popular belief, these are not permanent problems. Damaging items slowly lose influence over your credit rating as time passes, provided your recent credit behaviors are favorable. 

Bankruptcies tend to stay on your report for ten years. Other negative items are usually removed after seven.

7. You Can Get Title Loans Online Without A Perfect Credit Score

Now the last of our financial facts!

While you should work toward an exceptional credit score, you don't need it to get a title loan online from our direct lenders. The requirements are essentially easy to meet, allowing you to get money quickly when you need it most. 

Providing up to $15,000, the value of your vehicle determines the specific amount you receive with a title loan. The higher your vehicle’s worth, the more likely you'll qualify for the larger loans. Although, you should only apply for the amount you need. Title loans should be used in an emergency and applying for more than you require can cause unnecessary stress. 

Submit Your Title Loans Online Request Right Away!

Memorizing these financial facts about credit gives you the knowledge necessary to make effective money decisions during emergencies. 

Speaking of crises, our direct vendors are always available to process your title loan request. They understand the need for speed in times of uncertainty, so they will never make you wait longer than 24 hours to get your money.

Kickstart the process by filling out a form, using the chat feature, or calling us at 1-800-514-2274.

Note: The content provided in this article is only for informational purposes, and you should contact your financial advisor about your specific financial situation.