Being credit worthy is a big deal in our society. While there are host of important numbers in your financial world, few are as critical as your credit score.

Your FICO score, ranging from 0-850, affects your ability to buy a house or car, get a loan, qualify for a credit card, or even get a job.

Your FICO Scores

 

FICO scores are based on your credit reports, which in turn are based on four elements:

• Personal information
• Credit history
• Credit report inquiries
• Public records.

There are three agencies that track credit scores: Equifax, Experian, and TransUnion. You are entitled to a free report once every 12 months; Annual Credit Report is a great place to obtain this report.

The Purpose of Reviewing Your Credit Report

 

An annual review of your credit report provides information and allows you to do the following: See who has made inquiries about your credit, check it for errors, find out if you’re an identity theft victim, and determine your chances of getting a loan. It’s a good practice for everyone to establish and may be even more important if you have excellent credit.

It’s important to realize that a bad credit report doesn’t have to stick with you forever. In fact, even bankruptcies usually drop off your report after seven years. And the good news is that no matter what your score is today, you can always improve it.

Improving your credit score may take time and sacrifice, but it’s well worth it. The higher your FICO score, the better chance you’ll have of obtaining credit and loans with low interest rates. So whether you are just starting to establish your credit or are coming back from a financial setback, just keep on track and you’ll get there eventually.