Can you guess the two numbers you absolutely need to know because of the impact they have on your life? If you guessed your Social Security number was one of them, you’re correct, sir. But what about the second? Is it your phone number, bank account number or your street address?
It’s your credit score.
Why it’s important
When you apply for credit of any kind, even to rent a house or apartment, the first thing the lender will want to know is your credit score. A score of 700 or higher is very good to excellent. If your score is in this range you should be able to get just about any credit you would want, including a mortgage. But if you have a credit score of 500 or less, you could have a problem getting any kind of credit.
How your credit score is calculated
Credit scores are based on a formula developed by the company that used to be known as the Fair Isaac Corporation but is now just FICO. To spare you all the technical details, suffice it to say that your score is a mathematical representation of your credit report. The better a credit report you have the higher your score will be.
A big mistake
If you’re not getting and reviewing your credit report at least once a year, you’re making a large mistake. Your credit report can have errors or mistakes that may be negatively affecting your credit score. Naturally, you wouldn’t know this until you got and reviewed your report.
A little background information
You actually don’t have one credit report. You have three. This is because there are three credit reporting agencies–Experian®, TransUnion® and Equifax®. They all pull information from all the companies that have granted you credit, including credit card companies, personal loan companies, banks, and so forth. They compile this information into your credit report and use it to create your credit score.
A free copy annually
The three credit reporting bureaus are required by federal law to provide you with a free copy of your credit report once a year. You could write or phone each of those companies and request your free credit report but a simpler answer is to get all three from one source – the website www.freeannualcreditreport.com.
No really free credit score
Unfortunately, it’s not possible to get your credit score free with one possible exception. You can get your FICO score free at www.myfico.com but only if you agree to a free 10-day trial of the FICO Score Watch service. Or you can buy your score for $19.95 with no strings attached.
Be careful of those free offers
The three credit bureaus all have free credit score offers. However not one of these is your actual FICO score. These scores are based on the AdvantageScore, which is a formula for determining your credit score that was developed by the three credit bureaus themselves. This means that if you get your score from one of these agencies, you’ll have a good idea of where your stand but, again, it won’t be your true FICO score.
If you have a score of 500 or less
If you have a score of 500 or less, it’s probably because you have a big problem with debt. If this is the case, you should let our debt consolidation providers help. We are so sure they can help you become debt free in a reasonable amount of time that we offer a 100% satisfaction guarantee. If you are dissatisfied with the payment plans you’re offered, you can simply walk away and pay no fees or penalties. Call us today to learn more about debt consultation and how it could help you.