Credit card companies need to assess your risk before they choose to give you a credit card. The money you spend is money they owe, and if you are irresponsible with your finances, there is a good chance you will miss payments and the company will lose money. Yet credit card companies don’t have time to get to know every single applicant. So to streamline the process, they look at your past financial, debt, and credit history, which are compiled by three major bureaus: Equifax Experian TransUnion Each of these companies generates its own assessment of your credit risk. That risk is then turned into a number, known as a credit score. These numbers give the credit companies an easy to understand number that allows them to instantly approve you
At a young age many cardholders are tempted to abuse their credit cards because the repercussions seem unimportant. After all, credit scores are an imaginary concept, but the “money” they have with the credit card in their hands is tangible. Skipping a payment or two seems so easy, and the temptation to avoid credit responsibility is often too great for cardholders to avoid. Yet maintaining an excellent credit score is important, because: Good credit saves you money on interest rates. Good credit helps you find an apartment. Good credit helps you get loans to purchase a home or a car. Good credit allows you to receive more credit. Good credit is helpful if you need to get any type of loan or credit in the future. Your credit score shows