Is Your Credit Score a "Score" or a "Rank"??

Apparently there is a misconception out there that your credit score is just that; a basis of how you handle your credit, pay your bills, and your effort to stay on top of things. With this new economy that we've been thrust unwillingly into, that has apparently changed. It's not more-or-less a ranking of how you fit in with the ever-changing credit scores of the general population. The actual quote from a financial article is, "Your credit score is not a rating of your credit worthiness, but rather a ranking of your credit worthiness compared to the rest of the U.S. population at a specific point in time." Seem fair? Didn't think so. Read on...

The way that this article explains it, you can have a perfect credit score of lets say 760. If the general public (at a specific measured point in time) end up paying bills faster than you do (even if you're on time!), your score will drop, even though you haven't changed anything in your habits or spending. Conversely, if the public slips up a bit and falls behind in their payments, your score goes up as long as you haven't fallen behind yourself.

As they said it, "having a high credit score is still very important in getting the best mortgage rate, and you should be guided by the factors that make up your credit score. But, since you are ranked against the rest of the population and financial conditions also impact credit worthiness, improving your credit score is not always within your control."

For more information, contact Michael Sinton, CRB, CRS, SFR, e-Pro, Broker/Sales Associate, Weichert Realtors, directly at 732-904-3236, via email at Mike@MSinton.com.