What’s the Score?: Important things to know about your credit score!

For those who may not have heard, your FICO score (named after the Fair Isaac Corporation who invented the scoring method) is used by vehicle and mortgage lenders, credit card companies, and many landlords, to assess your worthiness as a borrower. Your credit score determines whether you will be approved for loans and how much you will pay in interest rate(s).

Maintaining a good credit score is so important, it can be very frustrating that so many credit reports contain erroneous information. According to a study by the Public Interest Research Groups, 79% of credit reports have errors and almost 1 in 4 of which are serious enough to potentially result in a credit denial.

According to most financial planners, consumers should pull their report and credit score roughly six months ahead of time if they’re planning a major purchase, like a house, so that they can fix any mistakes or take strategic steps to push their credit score higher. Consumers should check reports from each of the three major credit bureaus (Experian, TransUnion, and Equifax) before taking out a loan since many mistakes may appear on just one of the reports.

As unfortunate as it may seem, credit scores have become a critical piece of data on which people are judged. The following are several things you need to know about credit scores and some strategies in boosting your credit score.

WHAT’S THE SCORE?

A credit score can range from 300 to 850. The very best rates often go to people with credit scores above 760. The median credit score is 725. If your credit score is below 660, it is time to be concerned.

The very first step to increase your credit score is to know what your current credit score is. Pulling your credit report from each of the three credit bureaus to get your credit score is easier and less expensive than it has ever been. As a consumer you are eligible for one free report per twelve month period which can be requested from websites such as CashSmartUSA.com.

THIS ISN’T GOLF: THE HIGHER, THE BETTER

To increase your credit score, many times, just takes good common sense. The most important thing you can do is to be certain that you pay your bills on time every month. Just one late payment can cause your credit score to drop as much as one hundred points. Your credit score will be affected by the most recent late payment.

Having too many accounts with balances doesn’t do your credit score any good, either. So, paying down any balances you have below 50% of the credit limit can go a long way. However, once that card has been paid down, keep it open. Fifteen percent of your credit score is determined by credit history length.

As mentioned before, credit reporting agencies often make mistakes on your report.  If you notify them of a mistake, they must complete an investigation. They will contact the lender to verify that the information is accurate. If the lender can’t confirm, or does not respond back in a timely manner, then the information is removed from the credit report. If you have paperwork proving that information on your account is false, the odds of getting it corrected are greatly increased.

THE SCORE DOCTOR

It can be tough to find a reputable company in the field of credit repair these days. Don’t let yourself fall prey to sleazy credit repair scams. Do your homework and research your options. Some companies charge very high fees to take advantage of hurting consumers. Remember, you are giving your social security number and bank account numbers out to strangers, so be sure you have chosen a reputable company in the field. One such company is Halo Credit Solutions, who provides a guaranteed service at the unbeatable price of $99.00 for six months.

Following these steps is crucial in getting the credit you deserve. But don’t think this is just for people with bad credit. Everyone should be passionate about establishing and maintaining a good credit score, since it can save thousands in interest payments and insurance premiums, or even be the difference in someone achieving their dreams.