What is Your Score? What Does It Mean?
The credit industry is keeping score. Every time you apply for a credit card, a mortgage, insurance, or perhaps even a job, your application is judged in part by your credit score. Ranging from 300 to around 900, the number is used by lenders to objectively measure your creditworthiness. The higher the score, the more likely you are perceived to repay credit. Consumers with scores less than 600 usually are categorized as higher risk and may pay a higher interest rate or be denied credit.
Fair Isaac & Co. (FICO) is the largest creator of credit scores. While most lenders use FICO scores, there are many different kinds of credit scores, and some lenders even create their own scoring models. Thus, your credit score could vary by 30 to 100 points because lenders weigh credit factors differently.
Factors that affect your credit score include payment history, amount of debt you carry, length of credit history, whether you frequently apply for new credit, and your credit mix (credit cards, retail cards, mortgage, personal loans).
The best advice is to pay bills on time and only charge as much as you can afford to pay in full when the bill is due on credit cards and other revolving accounts.
Call the credit reporting agencies for pricing options for credit reports and credit scores:
Equifax (800) 685-1111
Experian (888) 397-3742
TransUnion (800) 888-4213
Your Credit Report Says a Lot About You
Don’t be the last to know what your credit report says about how you handle money, especially if you’re considering borrowing money for a house or a new car.
Your credit report includes how much credit you have and how you repay your bills; public record information, including arrests, bankruptcy, tax liens, or monetary judgments filed against you; and identity information such as name, nicknames, Social Security number, birth date, current and previous addresses, and names of past and current employers. It also lists the names of anyone who’s obtained a copy of your credit report for any reason.
But, lenders aren’t the only ones seeking information about your credit. Under the Fair Credit Reporting Act, a credit bureau may sell your report only to lenders, insurers, landlords, employers, and businesses that meet the need as defined by law. You must give written consent before credit bureaus can give information about you to your employer or to prospective employers.
The denying party must give you the name and address of the credit bureau that provided the information and, under federal law, you’re allowed a free copy of the report within 60 days of the denial.
Be wary of online or other offers that promise a free copy, as they often have hidden fees.
Finally, when you receive your report, look it over for inaccurate information. If you find mistakes, follow the credit reporting agency’s instructions on the back of your report outlining how to request corrections. The agency must investigate your claim, usually within 30 days. Under federal law, if an agency can’t verify a disputed item, it must delete or correct the item.
~Text from University Credit Union
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