Credit Report Score

Lenders and creditors use your credit report score to determine whether or not you qualify for loans and other forms of credit. This score is also used to determine what kind of interest rates you qualify for. Let us show you how this score works, how you can get a copy, and why you should do everything in your power to make sure you have the best score possible.

What is a Credit Report Score?

A credit report score is a three digit number that ranges between 300 and 900. Having a score on the high end of the scale means that you have a positive credit history and are much more likely to qualify for the best rates and terms when obtaining credit.

To get your credit report score, credit bureaus compare your credit report against the credit reports of millions of other people. The three-digit number they come up with is a calculated measure of credit risk. Lenders and creditors use this number to determine your creditworthiness and decide whether or not you will be given a:

• Car Loan
• Personal Loan
• Student Loan
• Mortgage Loan
• Credit Card

But, this isn’t all that credit scores are used for. Nowadays, employers also look at credit ratings to determine how responsible you are. A bad credit score may affect a hiring decision and cost you a job that you need.

Getting a Copy of Your Credit Score

Using your credit report, you can get an estimate of what your score might be. If you have a great deal of negative information on your report, your score is probably low. If your report is blemish free, you probably have a high score. For a more accurate idea of what your credit report score is, you can receive the score from one of the three major credit reporting bureaus:

• Equifax
• Experian Credit Bureau
• TransUnion Credit Bureau

Though you will be better served contacting one of the three major bureaus for your score, you can also get it from a variety of online services. These services normally require you to pay a fee or sign up for a package deal before releasing your score. Popular services include:

• FreeCreditReport.com
• CreditReport.com

Improving Your Credit Report Score

If you have a low credit report score, you should take every step possible to increase it. This score can greatly effect your financial well-being, and in some cases, your quality of living.

Though there are many different things you can do to give your credit score a boost, some steps are more effective than others. Here are several things in particular that are worth trying:

• Pay your bills on time! When you make a late payment your credit report score drops almost instantly. By making your payments on time, you not only increase your credit score, you also take steps to protect your current rating.
• Try to keep your credit card balances below 25 percent of your charging limit.
• Open up a few new credit accounts and use them responsibly. Make all payments on time and keep balances low.
• Check your credit report regularly for errors. It is estimated that 70 to 80 percent of people have incorrect information on their reports. It is your responsibility to make sure any and all mistakes get cleared up. The credit reporting bureaus will not do it for you.
• Don’t close old accounts that have been paid off. You will be much better served keeping the account and not using it. You get bonus points for having long-standing relationships with creditors.
• If you find yourself falling behind, consult a professional credit counselor to help you assess and improve your financial situation.