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Finding Your Own Credit
Score
Don't Pay Someone Else Thousands, Do It Yourself!
You
would think that finding out what your credit score is would be
easy. It should be, and in a way it is, but only because I’ve
done my research and you won’t have to spend all your time surfing
websites and pulling your hair out! It would seem logical to
have your credit score appear right on your credit report, but it
doesn't happen like that.
At
one time, your credit score was a big secret known only to financial
companies and banks. With the FACT Act, legislators decided
that it was important for individuals to know not only what their
personal credit scores were, but how they are calculated and
how they can be improved.
The
main company who calculates your credit score is the Field, Isaac
Company commonly known as FICO. They invented the concept of
the FICO scores so they are the ones who are known as experts in the
industry. Before we go into finding your score, let’s look at
a few facts about the FICO score.
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FICO
scores are your credit rating
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They
range from 300-850, higher is better
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Most
lenders base approval on them
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Higher
scores mean lower interest rates
-
FICO
scores are calculated based on your rating in five general
categories:
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Field,
Isaac Company is the inventor of the FICO score
-
They
have the only website offering all 3 of your FICO scores
-
The
median FICO score in the U.S. is 723
Essentially,
your credit score is simply a snapshot of your credit use -- it's
the Cliffs Notes version of seven years of your borrowing history.
In many lending situations, the lender bases its decision almost
solely on your credit score. Consider your credit score the overall
GPA of your borrowing history.
Now,
here’s the bad news. If you want to know your actual credit
score, you will usually have to purchase it. This can be done
in a few ways.
You
can get it from one of the three major credit reporting
companies: Equifax, Experian, and TransUnion. The fee
isn’t a huge one – usually around $15 or $20. However, if
you’re serious about growing your credit score, it’s well worth the
money to be financially responsible in the end.
You
can also go to www.myfico.com and get your FICO score directly from
them. They will offer you a free 30 day trial membership which
will get your credit score right now and then, if you wish to
continue the membership, it will update the score as it rises (or,
heaven forbid lowers).
If
you are applying for a mortgage, here’s a little good news for
you. You can find out your credit score for free! The
mortgage company will base their decision and interest rate on what
your credit score number is, so just ask and they’ll tell
you!
Don't Pay Someone Else Thousands, Do It
Yourself!
FICO scores range between 300 and
850. Here’s what those scores mean:
- Over
750 – you have excellent credit and
will be able obtain credit easily
- 720 or
more – you still have very good
credit and will be able to obtain credit easily
- 660 to
720 – this is an acceptable
credit. You can still get loans, but you may pay a higher
interest rate
- 620 to
660 – creditors are going to be
uncertain about lending you money
- Less than
620 – you have poor credit history
and will probably not be able to obtain credit on your own.
Knowing the above
information makes it obvious that if you need or want to get credit
for something, the higher your score is, the better your chances are
to not only get credit but get it at a handsome interest rate.
If you are in the 660 to 620 range, you may still get a loan, but
the interest rate is likely to be higher.
Don't Pay Someone Else Thousands, Do It
Yourself!
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