There are many misconceptions and false information about credit scores which lead many debtors to believe that they are not important. There are even debtors who think they do not have a credit score at all. But the truth is, these false beliefs about their credit scores can greatly affect not only their financial life but their life as a whole, too. Let me explain.

If you happen to have a bank account or bills to pay, then you do have a credit score, which is more important than you may have realized. Your credit score, which is also referred to as your credit rating, FICO score, FICO rating or credit risk score, is that all-important three-digit number that lets lenders have an idea how well you repay your bills and handle your finances.

When you apply for credit loan, lenders look at your credit score to let them know if you are a good credit risk or not. In other words, if you have a high credit score, it will be easy for you to get a loan because it indicates how responsible you are with your financial obligations. Generally, the higher your credit score is, the lower the loan interest rates you will get. But on the other hand, if you have a low credit score, it might be hard for you to get a loan with great interest rates because it might be hard to find a lender who will trust you financially.

But getting a loan is not the only situation where you will feel the importance of having a good credit score. It also determines the the premium on your auto or homeowners insurance, the mortgage types available when you're buying a house, or even when you're getting a job or about to look for an apartment.

When you are applying for a job that requires you to handle money, or apply for some more exclusive type of apartment living, your credit score is considered, too. Your prospective superiors check your credit score to let them have an idea if they can trust you to handle a job that requires you to handle money, which is sensitive and calls for a large responsibility. Your apartment manager looks at your credit score to let them know if you can pay your rent on time.

Many people are wondering what is considered to be a good credit score or a bad credit score. Credit scores range between 300 and 850. Anything over 720 can help you get a loan with great interest rates. But if you have a credit score ranging below 600, it might be hard for you to get credit at great rates. But you should not be discouraged if you have a bad credit score. There are lenders who will still work with you even if you don't have a pretty high credit score, while there are lenders who will still give you a loan if your credit score ranges in the 600s. There are lenders who look at your entire credit report, while there are lenders who will consider your credit score alone when you are applying for a loan. So you see, not all lenders work the same way. You just have to find very hard for a lender who will still work with you if your credit score is not that high.

Because there are many false information about credit scores, many debtors believe that the only way to have a great credit score again is by turning to a credit repair company who claims they will repair their credit for them and they won't have to worry again about their credit scores. But the truth is, since many debtors want to repair their credit, credit repair is a big business and many credit repair scams exist. You should know the types of credit repair scams that are only out to get your money, so you can protect yourself and avoid adding another problem to your financial life.

Having a great credit score is indeed important if you don't want your financial life to suffer. Having a high credit score can give you many benefits not only when it comes to getting a loan or making major purchases such as a car or a house, but also when applying for a job or an apartment. Above all, it can give you some peace of mind.