That's a good question, but before we answer it, let's take a look at just exactly what your credit score is? Your credit score is a number picked by the big three credit reporting bureaus Experian, Equifax, and TransUnion. This number will be somewhere between a low of 300 and a high of 900. Your credit score is very good if it is 650 or above, and you should qualify for some good rates when applying for a loan. No matter what your credit score is, you should be trying to improve it! Why? Just raising your credit score by 100 points (very doable for most of us.) can save you a whole lot of money! More about raising your credit score in a moment. First let's take a look at what your credit score is used for.
Your credit score will of course always effect the terms you will be offered when trying to borrow money from a lending institution. You may be surprised to know your credit score may be scrutinized by a perspective employer or even a perspective landlord! A bad credit score can effect your in so many negative ways! So, how do you check your credit score? Well, while the credit reporting bureaus may offer you your credit report, be aware that your actual credit score is seldom included. You can obtain your credit report complete with your credit score by signing up for one of the credit bureaus services, and sometimes these services are offered with a free trial period, which may allow you to get a copy of your complete credit report, and cancel your membership before you pay any money. You can also get a free copy of your credit report and credit score if you have been turned down for credit lately. There are also a ton of sites online that will sell you a copy of your credit report, just Google "Get My Credit Report" or "What's My Credit Score?"
Ok, I got a copy of my credit report...and it's not that good! What can I do to raise my credit score? Here are a few tips to help you do that:
1. First, get a copy of your credit report, including your credit score, and check it very closely for errors. You might be amazed at just what is on your credit report! I once found a mortgage loan on my credit report that wasn't even mine! A $1000.00 payment that I wasn't making, but was held against me, wow, did that ever mess-up my debt-to-income ratio! Those kind of errors are fairly common and tend to be a very easy fix.
2. Never use all your available credit! If you only use about 1/3 of your available credit you should be ok. This would show that you have money available and are in control of your finances. If you are above the 1/3 threshold, you can call you credit card issuer and ask for an increase of your credit limit, or transfer money onto other cards to keep each of your credit cards below 1/3 of being maxed out.
3. Keep all your credit accounts open and in good standing. Remember untapped credit looks good to the credit reporting bureaus, although loading up on credit cards isn't a good idea either. Just have several credit cards and try to keep a small balance on each.
4. Pay all your bills on time!! Very important!! Do this consistently and your credit score can improve, it's as simple as that. It's estimated that about 35% of your credit score is determined just by your payment history! So remember, never be late on any payment, even a library fine! And never, ever, let an unpaid bill go to collection...ever!
So regardless of how high your credit score is, make it point to try to raise it by 100 points and change your life for the better on so many ways. Don't procrastinate, get started today, and answer the question "What's My Credit Score" with the answer you want!