The ABC's of Credit Scores

Real Estate Agent with Joy Daniels Real Estate Group, Ltd.


Credit plays a role in everything from buying a home, to signing up for cell phone service or utilities, to getting car insurance. A credit score is a snapshot taken by the three leading credit bureaus, TransUnion, Equifax and Experian, that allows lenders to determine whether or not you will be extended credit, the amount of credit and even the terms (interest rate, loan amount, repayment schedule).

What is a credit score and how is it calculated?

A credit score is a number between 300 and 850 that is used to predict how likely you are to pay your bills. Many of the companies with whom you have a loan or a line of credit report back to the three credit bureaus information such as whether you pay on time, your credit amount, etc. Your credit score is calculated from this personal financial information. The higher your credit score, the better the credit terms you will receive. The lower your score, the higher the interest rates you may have to pay. Generally, scores over 700 are considered excellent while scores below 600 are considered poor.

You are eligible for one free credit report per year from each of the three credit reporting agencies. Take advantage of this opportunity to monitor your credit report and ensure there are no mistakes or surprises with your credit.

How can I improve my credit score?

Although there are no quick fixes when it comes to improving your credit score, you can take steps to rebuild your score over time:

·        Continue paying your bills on time — your payment history matters.

·        Don't max out your cards or even run the balances up high.

·        Hold off on applying for new credit or cancelling an old card, since length of credit helps.

·        Pay down high balances, but don't just transfer debts among several lenders.

·        Settle any collections or past due accounts that you possibly can.

·        Dispute and resolve any inaccurate items in your credit report. The last two years of your credit history are the most important


Credit scores affect your life — beyond just mortgage interest rates.

Credit scores are often used in determining prices for auto and homeowners insurance. Employers have also begun using the scores as part of background checks when making hiring decisions. The practice of using credit scores in nontraditional ways is expanding. It's more important than ever to educate yourself about credit. If you have more questions, email Richard Hirsch, Mortgage Master, Inc. and he can help you find local resources to provide you with credit counseling and more in-depth information.


Posted by


Joy Daniels, GRI, ABR, CSP, e-PRO
2793 Old Post Road, Suite 200
Harrisburg, PA  17110

(717) 695-3177  office - Call TODAY and let me help you find your dream home! - Email TODAY and let me help you find your dream home!

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Michael Jacobs
Coldwell Banker Residential Brokerage - Pasadena, CA
Los Angeles Pasadena Area Real Estate 818.516.4393

Joy -- excellent advice for anyone interested in knowing the background beyond the numbers and the ins/outs of improving/maintaining a good credit score.  

Oct 06, 2012 03:16 AM #1
John Pusa
Berkshire Hathaway Home Services Crest - Glendale, CA
Your All Time Realtor With Exceptional Service

Joy - Thank you for sharing detailed quality information about the ABC's of credit scores.

Oct 06, 2012 03:43 AM #2
Suzanne McLaughlin
Sabinske & Associates, Inc. (Albertville, St. Michael) - Saint Michael, MN
Sabinske & Associates, Realtor

This is a great post, Joy!  Thanks for getting this valuable information out to consumers!

Oct 06, 2012 05:04 AM #3
Roy Kelley
Realty Group Referrals - Gaithersburg, MD
Roy and Dolores Kelley Photographs

Very good information for prospective home buyers.

Have a wonderful weekend with your camera in hand.

Oct 06, 2012 05:13 AM #4
Joy Daniels
Joy Daniels Real Estate Group, Ltd. - Harrisburg, PA
I thought this was good info for anyone buying or thinking about buying a home.
Oct 06, 2012 08:06 AM #5
Joy Daniels
Joy Daniels Real Estate Group, Ltd. - Harrisburg, PA
Thanks to all of you for your kind feedback, please feel free to use this information with your buyer clients as needed.
Oct 06, 2012 08:08 AM #6
Don Sabinske
Don Sabinske, Sabinske & Associates Inc. - Zimmerman, MN
Sabinske & Associates Inc.

Nice informative post for your clients.  BTW, I am self-employed, my score is 850.

Oct 06, 2012 08:10 AM #7
Endre Barath, Jr.
Berkshire Hathaway HomeServices - Beverly Hills, CA
Realtor - Los Angeles Home Sales 310.486.1002

Joy, good information for both Buyers and Sellers to give them a better understanding of the Credit Scores!

Oct 06, 2012 04:32 PM #8
Joy Daniels
Joy Daniels Real Estate Group, Ltd. - Harrisburg, PA

That's a VERY impressive credit score Don - Mine is 795. . . I just can't hit that 800 mark!  :)


Thank you Endre.  I think Credit Scores are often misunderstood!

Oct 06, 2012 11:26 PM #10
Dave Sullivan
Real Estate One - Birmingham, MI
Michigan Realtor with an investor viewpoint

Joy well done not many understand how important this is... keep up the good work!

Jan 07, 2013 01:28 AM #11
Joy Daniels
Joy Daniels Real Estate Group, Ltd. - Harrisburg, PA
Thanks Dave. As professionals I think it's really important that we are able to share this kind of information with our clients.
Jan 07, 2013 10:50 AM #12
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