Your Credit Score, Your Best Friend Or Your Worst Enemy – Four Must Know Things About Credit Scores

Your credit score or FICO score is either your best friend or your worst enemy. Just try to get a good interest rate on a major purchase with a low credit score. You’ll end up paying through the nose on a high interest loan or worse yet; have the humiliation of being turned down for that loan or purchase.

1. Your credit score will determine if you get credit and what you pay for it. That’s because your score is the yardstick lenders use in determining how much risk they will be taking in lending you money. The lower your score, the more risk you represent and greater risk means higher interest rates.

Your FICO score impacts your life in more ways than you might have imagined. If you rent an apartment, the landlord will likely pull your score. The car salesperson is wondering what you FICO score is from the moment you walk on the lot. Even every day things like getting braces for a child, acquiring cell phone service or getting utilities turned on are impacted by your credit score.

2. Scores range from 300 to 850 and most people fall between 600 and 800. The difference in interest rates offered to a person with a score of 520 and a person with a 720 score is 3.45 percentage points, according to Fair Isaac’s Website. You may not care about a higher interest rate on small items, but you could be paying tens of thousands more on larger purchases. On a mortgage this can mean a difference in monthly payments of $235.00 to $750.00 or more per jadwal bola month depending on the size of the loan.

3. There are three credit bureaus – Experian, TransUnion, and Equifax. Each has a credit score, called a FICO┬« score. Your FICO┬« score depends on the information each credit bureau has on you and how they calculate their scores. You may actually have a score of 680 with one bureau, 720 with another and 700 with a third. As the information they have changes, so does your credit score and these changes could be daily depending on your credit activity.

4. Credit bureaus make mistakes. These credit bureaus manage millions of transactions per day and reporting errors are not uncommon. For example, someone with a similar name is significantly late on payments and it is posted to your account. These errors can be costly. Imagine going in to purchase a much needed car. You’re sure you have a good FICO score and the dealer declines the sale and tells you your score is too low. The morale of the story is know your credit score before any anticipated major purchase. Better yet, check it regularly and look for errors that can negatively impact your score.

Carefully monitoring and maintaining a high credit score can save you a ton of money. You are entitled to one free credit report per year from each monitoring bureau. Take advantage of this and pull your score at least annually and check your credit report carefully for mistakes.

As a bonus, here are two credit score resources. is a reliable source of information on credit scores and offers many low cost options to check and monitor your credit score. is another powerful source of information on all things credit and offers several very cost effective tools to monitor you credit score.

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