Bank Where You're Known
A recent study by the American Bankers Association reveals that 85 percent of Americans are aware that they have access to a free credit report each year, and 60 percent actually have checked their credit report in the last 12 months. The start of a new year is a perfect time to review your credit report and that all-important credit score.
Credit scores are based on the information in a credit report, and they can affect everything from whether you can get credit or not, to the credit cards you’re eligible for, to your interest rate on a car loan and home mortgage. A credit score also may determine whether you can rent an apartment, or even how big a deposit you will have to pay for telephone, electricity or gas service.
A credit score is a number that lenders use to estimate risk, and it helps them predict how likely you are to make your payments on time. Credit scores range from 300 to 850 and scores of 700 or more are considered a sign of financial stability. Higher credit scores mean you are more likely to be approved for credit, and that you are more likely to pay a lower interest rate on new credit.
By law, you may obtain one free credit report a year (www.AnnualCreditReport.com) -- more if you have been the victim of identity theft. You can also obtain your credit score from any of these three credit bureaus for a reasonable fee: Equifax (equifax.com), TransUnion (transunion.com) and Experian (experian.com). Each agency operates independently, so sometimes their records differ. In order to be sure your reports are current, any corrections or updates to your file must be sent to each credit reporting agency.
If you haven’t checked your credit report lately or want to start working on improving your credit score, now is the time.