Your Credit Score and You
Good credit. With these two little words, you can save thousands of dollars in interest on mortgages and loans with a lower interest rate. But do you know what affects your credit score or how to know if you have good credit?
Good credit is determined by figuring your credit score. Your credit score (FICO) is a number between 300 and 850 that lenders use to help determine the interest rates for any money you borrow. The lower your credit score, the higher your interest rates. You may even be totally passed over for a loan due to your score. A score above 700 may allow you to receive the best rates.
Your credit score is based on your past credit record, which is recorded by companies such as Experian, TransUnion and Equifax. They calculate your credit score based on certain factors, including payment history, credit card balances and credit application inquiries.
Everyone is allowed to check his or her credit score by ordering a free annual copy from each credit bureau. You can view your own credit report by visiting www.annualcreditreport.com or call 1-877-322-8228. And when you receive your credit report, be sure to check it thoroughly for any inaccuracies. A recent survey revealed that 80% of all credit reports contain mistakes.
Under the Federal Fair Credit Reporting Act, credit-reporting agencies and companies that provide information about you are required to correct inaccurate information. Here are a few tips on how to correct any inaccuracies:
* Put it in writing. It's best to write a letter and send it via certified mail, especially is you are correcting a serious matter. The letter should include your name and address, and identify each item in the report that you are disputing.
* Send a letter to the lender or business that provided the inaccurate information to the credit bureaus and attach copies of any supporting documents.
* Keep good records of all communications with the agencies.
* If you're unable to resolve the dispute, you can ask that a statement be included in your file and on future credit reports.
* If a credit bureau refuses to remove inaccurate information from your file, the Fair Credit Reporting Act gives you the right to take legal action.
Good credit has its rewards. Having it allows you to save thousands in interest payments. Monitoring and protecting your credit score can also save you from many sleepless nights.
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Good credit is determined by figuring your credit score. Your credit score (FICO) is a number between 300 and 850 that lenders use to help determine the interest rates for any money you borrow. The lower your credit score, the higher your interest rates. You may even be totally passed over for a loan due to your score. A score above 700 may allow you to receive the best rates.
Your credit score is based on your past credit record, which is recorded by companies such as Experian, TransUnion and Equifax. They calculate your credit score based on certain factors, including payment history, credit card balances and credit application inquiries.
Everyone is allowed to check his or her credit score by ordering a free annual copy from each credit bureau. You can view your own credit report by visiting www.annualcreditreport.com or call 1-877-322-8228. And when you receive your credit report, be sure to check it thoroughly for any inaccuracies. A recent survey revealed that 80% of all credit reports contain mistakes.
Under the Federal Fair Credit Reporting Act, credit-reporting agencies and companies that provide information about you are required to correct inaccurate information. Here are a few tips on how to correct any inaccuracies:
* Put it in writing. It's best to write a letter and send it via certified mail, especially is you are correcting a serious matter. The letter should include your name and address, and identify each item in the report that you are disputing.
* Send a letter to the lender or business that provided the inaccurate information to the credit bureaus and attach copies of any supporting documents.
* Keep good records of all communications with the agencies.
* If you're unable to resolve the dispute, you can ask that a statement be included in your file and on future credit reports.
* If a credit bureau refuses to remove inaccurate information from your file, the Fair Credit Reporting Act gives you the right to take legal action.
Good credit has its rewards. Having it allows you to save thousands in interest payments. Monitoring and protecting your credit score can also save you from many sleepless nights.
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posted by Bob Moser at
8:20 PM
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