What You Need to Know About Your Credit Score
Thinking of making a large purchase coming up such as a home, vehicle, or even a personal loan to pay off previous debt or combine student loan, well you cannot do any of these without someone reviewing your credit score. To ensure loan approval, not to mention that you are not paying outrageous amounts of interest with little going to principal balance, you need to at least have above-average credit scores. As typical credit score ranges from 350 to 850 and is based on information on from your credit report such as credit history and payment amounts. The higher the score, more likely you can be trusted to pay back debt to creditor’s, and you are rewarded in a sense with the least amount of interest to pay back. A “good” credit score can range from 720 to 750 to start to get the best rates out there, so 750 to 800 is typically very good, and 800 and over should never have any issue getting approval from lenders.
How do I know my credit score? Well you are entitled to a free copy of your credit report at least once a year, by the three major credit bureaus: Experian, Equifax, and TransUnion, directly with them or from trusted sites such as annualcreditreport.com. The only catch is that your credit score is not included for free, so you will have to pay a few dollars extra for that, or if you have credit card accounts, most are including your credit score in your online account and statement, that you can view each month and show the changes from the previous month. It may be viewed as FICO score on these, which is still your credit score, it is same, the most widely used for credit decisions. Which credit bureau you review your score actually may change a few points between each, depending on the information on each report, so it is important to double check.
When viewing your report make sure all of the information is correct, you can verify the accounts and balances on each, and payment history is accurate, as high balances and negative payment history will lower your score drastically. If you do need improvement, make sure you are paying down balances, and on time, even if you can only make a minimum payment one month, never let it go, or it may take 7 years to clear off.