Credit Is As Credit Does: What’s Your Score?

Welcome to Finance 101. I am positive that you have seen the commercials for the company pushing for people to get a free credit report with the sucker taking his buds to a concert and his mom is driving because he failed to pay for a snowboard trip or something and couldn’t buy his own car because his credit score sucked. Anyway, the point is, credit is as credit does. You ignore it, it will ignore you and not in a good way. You take care if it and mind it, it will take care of you.

Randomly, this topic came up during a conversation at work today while googling ourselves. How do companies get our information? How are we scored? Who determines our scores etc. What does your score mean? Why do I care about my score? How do I check my credit score?  The list goes on so I decided to blog about it. Obviously this is a very broad topic so I will start with the basics and expand later.

What is a credit score and how does it affect me?

Your credit score helps lenders determine whether or not you are a risk. If they lend you money are you going to pay it back on time or will you default? History always repeats itself so they tend to err on the side of caution. Your score tells them whether or not you are good for it. Scores range from 300-850. 300 being poor and 850 being perfect.

Who determines my credit score?

There are three major credit bureaus. TransUnion, Equifax and Experian. Equifax is the only site that will sell you a FICO score. Your score is updated every 30 days. Your score helps lenders determine your interest rate as well.

What does FICO mean?

For all you Bay Area babes, I am not referring to Pheeko the DJ, I am talking FICO (fy-ko) the score. FICO stands for Fair Isaac Corporation. It is a scoring model used to determine whether or not you are a risk to lenders.

How do I access my credit score / credit report?

You can go online to and request your credit scores from all three bureaus or from any of the above credit bureaus for free once a year. There are other independent companies that offer this service as well. Many offer packages for a fee to gain access to your credit information year round.

Why should I review my credit report?

You want to manage your credit information as if it were your report card. Clean it up before the parents see it or in this case a lender. Look for inaccuracies such as misspellings, wrong addresses, inaccurate accounts. With credit fraud and identity theft scams increasing, it is a wise choice to monitor your report regularly for suspicious activity. You can dispute inaccurate information online by clicking the following links to TransUnion, Equifax and Experian.

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