A high credit rating will help you get approved for the credit cards and loans you need. It will also grant you the benefit of lower interest rates on any credit cards or loans you qualify for.
The Facts
Credit scores range from 300 to 850. The higher your credit rating is, the less risk a lender incurs by loaning money to you.
Features
Your credit rating is determined by the information contained within your credit report. Creditors will report the amount of your debt, the type of debt you have, and your payment history to the credit bureaus. A history that reflects small to moderate amounts of debt with regular payments will contribute to a high credit rating.
Time Frame
The information contained in your credit history will only appear for a set amount of time. Positive closed accounts will report for 10 years, while most negative entries are limited to reporting for only 7 years (See References 1).
Considerations
Some creditors do not report to all three credit reporting agencies. Because of this, your credit score may vary depending on the credit reporting agency it is pulled from.
Warning
If your credits score drops for any reason, the interest rate on any credit cards or revolving lines of credit that you have may increase. This is because your lenders will regularly review your credit rating to ascertain that you are still a good lending risk. If you risk level increases, your interest rate is likely to increase as well.
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