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BE AN ACTIVE GUARDIAN OF YOUR CREDIT

What You Don't Know Can Hurt You

Seventy percent of Americans have never seen their own credit report or credit score.

Did you know that you have a credit score? That score impacts a surprising cross-section of life. Lenders use it to evaluate your eligibility for credit cards and loans. Landlords use it to gauge the likelihood you'll pay the rent. Insurance companies may base your premium on it. Potential employers often use it to assess your character.

Over one hundred variables are included in the calculation of your credit score, so just paying your bills on time, as important as that is, may not rescue you from other credit pitfall. Your score impacts a surprising cross-section of life. Lenders use it to evaluate your eligibility for credit cards and loans. Landlords use it to gauge the likelihood you'll pay the rent. Insurance companies may base your premium on it. Potential employers often use it to assess your character.

Over one hundred variables are included in the calculation of your credit score, so just paying your bills on time, as important as that is, may not rescue you from other credit pitfalls.

Mind Your Own Business

Be an active guardian of your credit. Before you consider refinancing or remodeling, send for a copy of your credit report and credit score. You want to see in advance exactly what the lender will see.

Bills long overdue or overlooked can show up as a blotch on your credit. A cable bill that didn't make it to your new address. An invoice lost in the mail. A department store error. Since it can take 30-60 days to resolve disputes and inaccuracies, take care of your credit first, and then go shopping.

Who knows more about your finance, YOU or your automobile salesman? Gone are the days when a hopeful couple sat across the desk from their local banker anxiously awaiting his decision on their loan application. Today, the fate of their loan and the rate of their interest hinges on a computer generated number: their credit score.

WHAT'S THE SCORE?

The FICO credit score ( named for the developers, Fair, Isaac & Company) reflects dozens of parameters in one's financial history. For years, this number was a tightly guarded secret. Congress has now secured your right to know your score- take advantage of it.

Score 700-850 - smooth loan process: best interest rates

Score 550-699 - medium risk; higher interest rates

Score 300-549 sorry, no loan or credit cards

KNOW YOUR SCORE

Are you counting on a new car, a new roof, new furniture? Before you talk financing, sent for your credit report and FICO score. If there are errors or other surprises, contact creditors to make corrections or negotiate settlement. Also, be sure to notify the credit bureau of your dispute.

In our credit-driven society, taking charge of your credit should be an ongoing process. Your FICO score is a snapshot in time, not set in concrete. Review it each year for errors that may have crept in and to monitor your progress. You have the power to know it, raise it, maintain it.

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