Free Credit Report

Too many consumers are confused about credit scores. Most did not know who makes credit scores available, what is a strong score, nor the financial cost of a poor score.

Your credit score is a numerical rendition of your creditworthiness. It indicates how well or how poorly you’ll repay a debt. The higher the number, the more likely you’ll repay on time. Credit scores are important, influencing whether consumers can purchase a wide range of important services and at what price, including mortgages.

Basic information to know about your credit score:

• Mortgage lenders and credit card issuers use these scores to determine whether to extend credit and/or at what price.  Many non-financial services — such as cell phone companies and landlords — use credit scores to determine whether to offer a service and/or at what price.

• The three main credit bureaus — Experian, Equifax, and TransUnion — collect information on which credit scores are most frequently based.  The survey also advises, an individual has many different credit scores, which are either generic or lender-based. Generic credit scores are available from many sources — not just FICO and the three credit bureaus but also many other websites.

• Three key ways to raise a credit score or maintain a high score are making all loan payments on time, for each credit card keeping balances under 25 percent of the card’s credit limit, and avoiding opening several credit card accounts at the same time  

• A large majority of consumers correctly understand the following about scores: Missed payments, high credit card balances and many applications for new accounts at one time are factors used to calculate credit scores.  It’s a lot more difficult to raise your score than it is to lower it. Making a couple credit card or mortgage payments late may take a year of on-time payments to restore one’s old scores.

Like the mortgage industry, much needed disclosures are coming for credit scores.  You are entitled to one free credit report a year from each of the credit reporting bureaus — Experian, Equifax, and TransUnion — from the only federally-sanctioned web site for free reports AnnualCreditReport.com.