What Is My Credit Score And How Does It Affect My Financial Standing?

When you apply for a credit card, the company that issues the card will check your credit report before making a decision on whether to grant you the card or not. They don't use the report in its raw form, though. Instead, they take the information in your credit report and use it to assign a 'credit score' to you. The credit score allows the card issuer to immediately decide whether to offer you a card and at which rate of interest, as well as how much of a credit limit they're willing to allow you. So what's this credit score, precisely?

How Your Credit Score is Determined
The information in your credit report is compared against the information of an ?ideal customer'. This ideal customer's profile will vary from company to company, but in general it is the picture of a person who pays his or her bills on time. It's drawn from statistics kept by the banks and the government, and perhaps even by the company itself. Each bit of information that they gather on you is ticked off against the list and assigned a numerical score. While every scoring instrument is slightly different, they all do something like this:

Married:  1 year  +10 points
               5 years  +15 points
              10 years +25 points

Own Home:    +50 points

CCJ       1  -100 points
              2-3 -350 points

When they've done with their calculations, your credit report and other information that they have about you has been distilled into a number - your credit score.

How Your Credit Score Affects Your Financial Standing
Very simply put, the higher your credit score, the easier it will be for you to obtain credit. If you have a very high credit score, for instance, you are pretty well assured of being approved for the best credit card deals available. It affects you in other ways as well, though. Credit card companies aren't the only ones who check your credit score. A high credit score will be to your benefit when you apply for a job or go to rent a flat, among other things.

How Knowing Your Credit Score Can Help You Compare Credit Cards
When you apply for a credit card, it's important to compare credit cards against each other to find the best credit card available to you. Knowing your credit score can help you focus in on those cards for which you are most likely to qualify. Applying for the credit cards that are aimed at people in your credit score range will do more than make it less frustrating for you - it will help preserve your credit score.

When you apply for a credit card - or any type of credit - it leaves a ?footprint' on your credit record. When prospective lenders like credit card companies check your credit record, they do take note of how many inquiries there have been into your credit history. Having too many can hurt your chances of being accepted for the best credit card rates. That being the case, it is in your best interests to compare credit cards and apply for the best credit card that is likely to accept your application.
One way to compare credit cards at moneyeverything.com is by market at which they're aimed. When you shop through the credit card offers, make a note of which are aimed at those with excellent credit, those with good or with fair or with poor credit. In today's credit card marketplace, there is a credit card for everyone. Compare credit cards with each other to find the best credit card for your use.