Finding Out Your FICO Score
A growing number of creditors, as well as insurance companies, employers, and landlords, use something called a FICO score together with (or even instead of) your credit history to make decisions about you. Your FICO score is a numeric representation of your creditworthiness and is derived from your credit history information. Like your credit history, the score is a snapshot of how you’ve managed credit in the past. As such, your FICO score is generally considered an indicator of how well you are likely to manage credit in the future.
Actually, a variety of different credit scores exist. Equifax, Experian, and TransUnion have developed their own credit scores. (Each credit-reporting agency sells its credit score on its Web site.) But the FICO score has become the industry standard.
Your FICO score can range from 300 to 850. The higher, the better: A score of at least 720 is considered to be very good. If your score is well below 720, you may still qualify for credit from some creditors, but you’ll be charged a higher interest rate and you may not qualify for as much credit as you would like. Likewise, insurance companies may be willing to sell you insurance, but you’ll probably pay extra for the coverage and you may not be able to purchase as much insurance as you would like. When you have a low FICO score, some landlords will not rent to you, and you may not qualify for certain kinds of jobs, especially those that involve handling money.
You can raise your FICO score by improving the state of your finances. For example, your credit score will go up if you.
- Pay down your account balances.
- Begin paying your debts on time.
- Build up your savings.
- Minimize the amount of credit you apply for.
- Correct problems in your credit histories.
Categories: Credit, Money Tags: FICO Score, Finding Out Your FICO Score, web
Knowing Why Your Reports Matter
The credit report you get is the same one that your current creditors and potential future creditors use to make decisions about you. The more negative information is in your credit histories (such as past-due accounts, accounts in collection, accounts that your creditors have charged off as uncollectible, tax liens, and so on), the worse your finances are.
Your existing creditors may use the information to decide whether to raise the interest rates you are paying, lower your credit limits, or even cancel your credit. And whenever you apply for new credit, the creditors review your credit record information to decide whether to approve your application, how much credit to give to you, the interest rate you must pay, and so on.
Many insurance companies, landlords, and employers also review your credit record information. If they find a lot of negative information, insurance companies may not agree to insure you or may charge you higher-than-normal premiums; landlords may refuse to rent to you; and employers may not want to hire you or to give you the promotion you applied for.
Categories: Credit, Finances, Money Tags: Knowing Why Your Reports Matter
Getting Copies of Your Credit Reports
For a comprehensive survey of your creditworthiness, order a copy of your credit report from each of the national credit-reporting agencies, not just from one. Each report may contain slightly different information about you, partly because not all creditors report all consumer account payment information to all three agencies.
You are entitled to one free copy of each of your credit reports every year.
If you’ve already obtained free copies of your credit reports during the past 12 months, you must pay a fee to order additional copies. In most states, the cost is $10 per report (and some states also charge a sales tax), although the cost is less in some states. You can call your state attorney general’s office to find out.
Also, you are always entitled to a free credit report if
- You are unemployed and intend to apply for a job within 60 days.
- You are receiving public welfare assistance.
- You believe that you have been the victim of identity theft.
- You have been denied credit, employment, insurance, or a place to rent within the past 60 days because of information in your credit report.
To order additional copies of your credit reports after you’ve obtained your free annual ones, you must contact each of the three credit-reporting agencies individually. You can order the copies by mail, by phone, or online.
Categories: Credit, Money Tags: Credit Reports, Getting Copies of Your Credit Reports
