What is My Credit Score and Why does it Matter?

Feb 20, 2008

I believe your credit is very important and will affect you in all financial transactions. For example credit cards, loans, mortgages to buy homes or condos.

It could cost you thousands of extra dollars over your lifetime. It is a number between 330-830. If you have good credit -- 700 plus -- you get what they call Grade A rates because you are less of a risk of not paying it back!

What is your FICO score? It is a number that is a registered trademark of Fair Isaac, the company that founded it. It is a credit risk score based on multiple factors, if you are a risk to lenders. Some employers even use it. Let’s say you wanted a job in financial services sales. If you had a very low credit score, it may cause you to do make unscrupulous sales because you are desperate to pay your bills.
Know your FICO® scores, improve your FICO scores, save money
What’s In Your FICO SCORE?



How FICO Scores Work
When you apply for credit – whether for a credit card, a car loan, or a mortgage – lenders want to know what risk they’d take by loaning money to you.
FICO scores are the credit scores most lenders use to determine your credit risk. You have three FICO scores, one for each of the three credit bureaus – Experian, TransUnion, and Equifax. Each score is based on information the credit bureau keeps on file about you. As this information changes, your credit scores tend to change as well.
Your 3 FICO scores affect both how much and what loan terms (interest rate, etc.) lenders will offer you at any given time. If you want more info please go to:
www.myfico.com
The higher your FICO score, the lower your payments!
Having too much credit outstanding even if you don’t use it also counts against you. They measure how much potential you have: if you got into a jam, how much could charge up? If you say “I would never do that” then close what you don’t use. Close the newer ones first. Every time you go into a store and they say, do you want 10% off for applying for a store card you say, “yes, if you don’t have to run my credit report, which lowers my credit score.” I say it every time. Usually the cashier is stunned and says she didn’t know that.

Check your report annually!

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