How to Raise Your Credit Score and Improve Purchasing Power

In the present economy, it’s crucial that consumers have the ability to buy and sell goods and services. Everything we require for living (with the exception of air, which is still free of charge!) demands a financial transaction – clothing, groceries, transportation and shelter. The three-digit number that makes up what’s known as your credit score has substantial influence on your ability to conduct business and purchase the things needed for every-day life.

Credit scores are designed to be a extraction of your financial history. The algorithm takes into consideration various aspects of key financial points – your payment history, debt level, length of credit history, credit applications and types of credit. There are a number of things that can have a negative impact on the score, including making a number of applications for credit in a short period of time. If your credit score drops into a range considered less than favorable by lenders and others, you may have difficulty obtaining services and additional credit.

Many people are under the impression that if they are not buying things using a credit card, they aren’t utilizing credit and disturbing their credit score. They would be surprised to learn that many companies whose services they utilize see credit utilization and credit scores in a much different way. Cell phone carrier services consider the term of the contract, typically one to two years, to be an extension of credit. Similarly, utility companies, such as the gas company or electric company, are defined as extending credit because of the way you utilize services and the necessity to bill after services are rendered. As a result, these companies will take your credit score into consideration before agreeing to enter into a contract for services with you.

When you have a low credit score, it can elicit an additional security charge for services such as utilites and cell phone. In some cases, you might also have your service application denied completely as a result of your credit score, even if there is money to pay for the services. Nearly all landlords will check your credit history as part of the application process prior to signing a lease, and may refuse your application if your credit score is low. Not many people have the ready money to pay the entire lease period in advance, and your credit score reflects your power to pay – and whether or not you are liable to pay on time.

A low credit score may even have an effect on your employment opportunities. Many employers view a credit score as a factor when offering a job to someone. If you have a low credit score, you may find your job application denied.

Where a low credit score can close off opportunities or cost you additional money in fees and deposits, a high credit score will open up opportunities you weren’t aware existed. If you’ve always had high credit scores, you may not be conscious of the “perks” being offered to you. In addition to higher credit limits, individuals with high credit scores can normally obtain more credit and at a lower interest rate or with no fees. Additional deposit fees charged by service providers aren’t an issue if you have a high credit score. You are able to obtain a wider variety of services, generally with lower fees and higher rewards.

If you have a low or middle-range credit score currently, your best strategy is to take steps to improve it. If you enjoy the benefits of a high credit score – congratulations and keep up the good work!