Before the Holiday Season…Check Your Credit Score!

With the Holidays upon us, it is a better time than ever to know your credit score. Why? In short, your score is a snapshot of your financial history and a reflection of your financial intelligence, and well, that IS a big deal.

For instance, will you be applying for a credit card in the near future? A car loan? A mortgage? When deciding exactly how much credit they are willing to entrust to you, lenders consider your credit score. Credit scores range from 300-850, and it is best to stay above 700. The main credit reporting agencies are Experian®, Equifax®, and TransUnion®.

What Makes up Your Credit Score?

According to MyFICO, following are key categories that influence your credit score:

  • Payment history — 35%
  • Amounts you owe to creditors — 30%
  • Length of credit history — 15%
  • Number of accounts recently opened —10%
  • Type of credit used —10%

Ways to Raise your Credit Score:

  • Make payments on time!
  • Keep balances low.
  • Do not open too many new accounts—try to keep accounts for long periods of time.
  • Have different types of debt (installment or revolving).

All this information and the credit score are reported in your credit report, which
you may request from one of the reporting agencies. The reports also include information
pertaining to credit inquires and bankruptcy. Many places offer free credit reports that contain general information about your credit, but for a more detailed report often times you must pay. It is definitely worth the small amount to accurately know your credit score.

Keep in mind that it is very easy to lower your score, but it is extremely difficult
to raise it. Your credit score will follow you for the rest of your life, so be sure to plan accordingly.

For more on credit scores, check out http://www.myfico.com/crediteducation/whatsinyourscore.aspx

Regina Iulo (EJB)