You Credit Score Means Nothing!

You Credit Score Means Nothing!

Have you ever heard the saying, "You can judge a man by his credit score"? Whether you have or haven't, it is wrong. You can't judge anybody by their credit score because their credit score don't mean anything.

Do you have any idea where I am going with this?

The reason your credit score means nothing is simply because your credit score is only part of what mortgage lenders, auto lenders, and personal loan lenders look at. There is much more to a credit report than just the score and if that were the case many people would have found a way to inflate their scores in order to get better deals on cars, houses, and other this.

Think about it, if you had the chance to get better terms on a loan by simply doing one thing to your credit history wouldn't you do it? Well maybe not, but that is the thinking behind many big time lenders and that is why your credit score doesn't mean as much to them as it does to you. Just because you have a credit score of over 750 doesn't mean you are going to get automatically approved for a loan, many things go into consideration at this point.

Some of the things that lenders take into consideration is whether or not you have been making payments on time, how much debt you have, your debt to credit ratio, your age, how much of a history you actually have, how many default accounts you have now or in the past, and any notes that creditors make on your report. As you can see there is a lot more to a credit report than just the score.

When I was younger I ran my credit report and saw that I had a 738 and at that time I was just 20 years old. The thing about this is that just because I had a good credit score I still couldn't get a loan because I was considered to only having baby credit.

What is baby credit?

Baby credit can mean 2 things, you don't have a long enough credit history or you don't have enough different credit sources. What this means when you don't have enough credit sources is that you have one source such as credit cards. Having only credit cards on your credit history isn't a bad thing but it can't help you as much as if you had credit cards, personal loans, auto loans, and even some store credit cards.

The thing you need to know about your credit score is that it takes into account many things and sometimes lenders don't look at everything because they disvalue some stuff. The most important thing to most lenders is how long you have had good credit and the total amount of debt you currently hold. Think about it, if you were going to give money to somebody wouldn't you rather give money to a person who didn't already owe everybody they knew? It is that same thinking that the banking industry use that makes them as powerful as they are today.