MotherCredit®

Credit is simply the ability for a consumer to be able to borrow money in order to purchase a product or service. You can get credit from a grantor (for example, from a bank or microfinance institution or non-bank financial institution), to whom you will need to pay back the full amount and possible interest charges that might add up over the period of time. There are four different types of credit starting with revolving credit, charge card, service credit, and installment credit. When you get credit and pay it back on time your credit rating improves over time and allows you the opportunity to borrow more from grantors. You should check your credit often to see where you stand over a period of time.

There are many credit scoring systems in the world; the most popular ones are FICO, TransUnion and Vantage Score. MotherCredit® uses its own proprietary alternative credit scoring system and the scoring range starts at 300 as the poorest score and goes up to 850 as the highest range possible, or excellent credit. Checking your credit score with MotherCredit® is easy and can be done every quarter to see how your credit is performing.

• Poor (Bad) Credit Score:If you have a bad / poor credit score then it means you are sitting between the credit score range of 300 to 499. Having a bad credit score does have quite a significant impact on your ability to borrow credit from lenders. Getting anything from an auto loan to an excellent credit card at low interest rates will very difficult to achieve. Auto or home insurance can be higher along with utility deposits that those will higher credit score usually get to skip on will not be likely. Dipping to a bad credit standing usually means you forgot to pay some bills on your credit card or car loan but it isn’t the end of your ability to credit. You can find providers who will be willing to lend, albeit at higher interest rates, and if you continue paying your bills on time your credit can improve over time.

• Fair Credit Score:If you are sitting at fair credit then you are right between bad and good credit. This usually means that you are between the score range of 500 and 599. At this credit score range you will have a lot more options available than those with bad credit score ranges. At this point you can start applying for mortgages and auto loans and credit cards are quite common with a lot more options in this range as well. At this point the most ideal option is to continue to push for a good credit score to open up even more options when it comes to mortgages, loans, credit cards, and more.

• Good Credit Score:A good credit score ranges from 600 to 699 according to our MotherCredit® alternative credit score. If you find yourself below the ‘good’ range then you can do several important actions to get yourself back up. First pay your bills on time, watch your balances, don’t go overboard applying for credit, live within your means, mix up your accounts, and finally, look into the future – credit history counts. With a good credit score range you will get a lot of great perks when it comes to applying for credit such as credit cards, auto loans and mortgages.

• Excellent Credit Score:If you find yourself sitting at an excellent credit score range then you are on the range of 700 according to our MotherCredit® alternative credit score. Getting to this position in the credit scale means that your payment history, credit utilization, credit age, credit mix, and inquiries are at the perfect (or excellent) amount. Having excellent credit opens numerous doors to the top credit card offers, best rates of loans, and other offers offered by lenders. This doesn’t mean that you are ‘done’ building your credit, especially if you are on the low end of excellent. It is recommended to continuously improve your credit.

When you check your alternative credit score with MotherCredit® it makes no impact on your credit score since it is a soft credit check, not a hard credit check. When doing a soft credit check you are only pulling your credit score to view how you are performing, not because you are applying for a loan or other type of credit that you are hoping to get approved for. You do an alternative credit check via Mother Finance Mobile App as many as four times a year to help you determine your financial health and it will not affect your credit standing.

There are only certain factors that can affect your credit score. Some of those factors are your repayment history, credit utilization rate, credit age, account types, and the amount of credit inquiries you have on your account. More importantly, it also matters that type of inquiries that occurred. If it was a simple soft credit check, that MotherCredit® performs, your credit will not be affected.

We do not recommend checking your alternative credit score too often as your credit score will gradually improve over time, so it is best to check on occasion to see a much more significant improvement or decline and typically, they do not change overnight. You can do MotherCredit® alternative credit check via Mother Finance Mobile App as many as four times a year.

Make sure that you are paying all of your debt on time if possible. Doing so will not only improve your credit rating it will ensure that it doesn’t decline. Not settling bills on time can end up as a late payment and impact your credit score negatively. Paying your debts on time will eventually open up more doors to better interest rate loans and other more attractive credit offers. You can set up alerts as reminders to pay your bills so it won’t slip your mind.

Missing a payment on a loan, or credit card, will have a negative impact on your credit score. It is important that you set reminders for yourself to pay your bills on time or you can potentially slip into a lower credit range bracket limiting your ability to get new credit at low rates. Paying it back timely should always be your top priority at that point. You can be late to make a payment by a few days and it won’t matter too much but having too many late payments will have an impact on your credit score. Other consequences include being charged a late fee and increased interest rates on your account. Not paying your bills on time can make your debt end up in collections. For example, if you become delinquent on a debt, whether it is a medical bill or credit card or an installment loan, this type of debt can end up at a collections agency who will then try to recover that lost debt. Don’t be surprised if your name doesn’t end up in the credit bureau’s blacklist.